From Detroit Crain’s Business
The Local Money
Here’s how the federally required $210 million local funding match for the $528 million Woodward rail project breaks down:
• $73 million from the forthcoming sale of $125 million in Capital Grant Receipts Revenue Bonds by the Detroit Department of Transportation.
The estimated annual $10 million interest payment on the bonds will be paid from other annual federal grants received by DDOT.
• $12 million from previously received federal transportation grants to DDOT, which will pay for planning and preliminary engineering.
• $25 million from a Transportation Investment Generating Economic Recovery grant, federal stimulus funding aimed at surface transportation projects. The grant was given to the Michigan Department of Transportation and then turned over to DDOT.
• $100 million in cash donations and tax breaks (such as federal New Markets Tax Credits) assembled by the M1 Rail consortium of private backers and foundations.
• The above funding is 40 percent of the total capital costs and makes the project eligible for $318 million in federal funding under the Federal Transit Administration’s New Starts program. The city must apply for the funding.
The rail line’s yearly operations and maintenance costs are estimated to start at $2.1 million when the route begins service in 2015 and are expected to hit $16 million by 2030. An analysis of the project prepared for the Detroit City Council forecasts the line will carry 1.8 million riders annually — a number kept flat through 2030 in revenue and expense projections as a conservative estimate, the city has said. The city’s plan to cover the line’s cost breaks down as:
• $2.8 million from fares (at $1.50 per rider).
• $5 million from federal Congestion Mitigation and Air Quality grants.
• $2 million from the state’s Public Act 51, which is transportation project funding.
• $5 million from other state pledges.
• $1 million from federal Section 5309 Fixed Guideway Modernization Funds.
• $2 million from city’s general fund.