A response to Hopkins real estate developer: Southwest LRT is a sweetheart deal for developers, terrible deal for taxpayers

The Federal Transit Administration (FTA) has signaled Congress that it does not favor funding the expansion of light rail projects in Minnesota and elsewhere in the country. Neither the $2 billion Southwest LRT, now in the final stages of federal review, and the less well known but potentially equally expensive “Bottineau LRT” received full funding agreements before President Obama left office.

The FTA told Minnesota: if you want light rail, you pay for it.

The Trump administration and Congress could still fund the expansion of LRT but given the fierce competition for dwindling federal transportation funds, and the solid wall of local and state opposition to the projects, Congress is unlikely to fund either line.

Congressman Jason Lewis (R-Second District), who sits on the key committee for FTA funding (transportation), has been a sharp critic of the Met Council and its LRT plans for years.

We understand that developers were counting on the Met Council to get FTA approvals. But there has always been a risk for developers and construction companies that the constroversial SWLRT line would not be built.

Are taxpayers supposed to fund billions in capital costs and tens of millions a year in operating costs, then replace it all again in 25 years, for LRT that does nothing to relieve congestion because developers are relying on the project?

One such developer, Kelly Doran, wrote an enraged commentary in the Star Tribune last month when he heard that 84 state legislators had written to the FTA asking Secretary Elain Chao to kill Southwest LRT, calling them “selfish” and telling them it was not their job to fix the federal budget (as if that was what they were worried about instead of the state budget).

Congressman Lewis re-sent their letter to the transportation Secretary Elaine Chao, stating that Southwest LRT is a terrible use of federal funds.

Stuart Chazin wrote a great response to Kelly Doran but the Star Tribune did not run it, so we have published it here.

Chazin is the Chair of the Kenilworth Preservation Group and a board member of Lakes and Parks Alliance (LPA), a 501(c)(3) entity suing the Metropolitan Council in federal district court for violating federal laws governing the process for determining the placement of the track. LPA was formed as a grass roots organization with the mission of preserving the iconic Kenilworth trail.

The federal case is scheduled to be heard this fall; if successful, it will send the Met Council back to the drawing board. The lawsuit is one of several outstanding items that the FTA wanted resolved before issuing a recommendation for full funding. The other items are co-location agrements with freight lines.

Doran, who calls the LPA out as a bunch of NIMBYs “who have shamelessly joined hands with the project’s detractors,” speculated on the Hopkins real estate market, investing “more than $50 million in an apartment development located in Hopkins and directly on the Southwest-metro light-rail line.”

In a May 12, 2016 article in the Star Tribune Doran said, “I like Hopkins…and I probably would have done this project anyway. But LRT would be a huge positive contributor. And this project alone will generate four times the property taxes [of the previous structures].

We agree. Hopkins is a great little city. We think people will want to move there with or without LRT. If the density would have supported LRT (a dubious idea at best), then surely an express bus service to downtown or other points would do well there. Maybe the good folks at Southwest Transit in Eden Prairie could expand their very popular express bus service (classy, comfy seats, Wi-Fi) to Hopkins.

Here is Stuart Chazin’s response to Doran:

SWLRT Route Is a Sweetheart Deal for Developers

Contrary to his stated intention, Mr. Kelly Doran, in his March 28^th op-ed, wound up providing one of the best reasons why SWLRT is wrong for the Metro area: It is being built to benefit wealthy developers like him, instead of the people who need transit.

Otherwise, why wouldn’t SWLRT be routed through Uptown or the North Side in Minneapolis, or the West Side in St. Louis Park — areas rich in transit-dependent riders? Plans are to run instead through areas rich in vacant land where developers can build and benefit enormously from a taxpayer-funded project. (One wonders if Mr. Doran would be as excited about SWLRT if he had to pay a surtax on the financial benefits he would reap from its construction.)

Mr. Doran charges 84 legislators have shown “an incredible act of selfishness and foolhardiness” by opposing SWLRT funding in a letter to the Department of Transportation. I say those 84 legislators acted responsibly by representing their constituents and showed an incredible act of courage by fighting to stop this by any means possible.

In addition, the State of Minnesota has never held a single vote as to whether SWLRT is a good project to proceed with. Considering over $900 million of Minnesota tax dollars are going to be spent building this, most citizens believe that the Legislature should have some say in the building of one of the most expensive public works projects in Minnesota’s history.

He criticizes homeowners who oppose the route. He calls them NIMBYs who think SWLRT would damage them (they do believe it would endanger the lakes, destroy an urban forest, and introduce the catastrophic risk of igniting a catastrophic explosion of ethanol in adjacent freight trains). I say that if such “NIMBYism” is wrong, how much more wrong is Mr. Doran’s “IMBYism” — supporting the project to line his own pockets — at taxpayer expense.

Mr. Doran states he is investing more than $50 million in apartment developments in Hopkins directly on the Southwest-metro light-rail line because of SWLRT. He forgets he went twice on record in this newspaper saying he would have done the project even if the SWLRT weren’t built: “I like Hopkins … and I probably would have done this project anyway” (Star Tribune May 14, 2016 and August 31, 2016).

Mr. Doran claims that city councils all along the line support SWLRT, even though Mayor Hodges said, “Had the City of Minneapolis known from day one that freight would remain in the corridor, the city would never had agreed to Kenilworth Corridor as the preferred LRT route.”

He also forgets that the Minneapolis Parks and Recreation Board was preparing to sue the Met Council over the damage SWLRT would do to the lakes and parks — until Governor Dayton threatened to withhold $3.14 million in park board funding. However, concerned citizens continue to fight for the environment: The Lakes and Parks Alliance of Minneapolis is suing the Met Council over SWLRT for having violated federal environmental law. Three times the council has tried to get the lawsuit thrown out of court and three times the court has denied their request. The case goes to trial September 17, 2017.

All Minnesotans benefit from great transportation in the Metro area — it’s the economic engine of the state. But at a jaw-dropping cost of $2 billion, SWLRT must have as its goal to serve the people, not to line the pockets of Mr. Doran and other developers.

You can read Kelly Doran’s commentary in its entirety here.