BOMBSHELL: M1 Rail won't provide $100 million for DDOT's current Woodward rail plan

**BShea** · July-10-11, 09:37 PM

An unhappy M1 Rail puts project funds on the line: Group sees DDOT's plan as unsustainable

By Bill Shea
The proposed Woodward Avenue light rail project is in jeopardy.

The private consortium of investors that has pledged $100 million toward the project's $528 million cost doesn't have faith in the Detroit Department of Transportation's plan and won't provide funding until it does, sources familiar with the situation told Crain's.

The group of prominent Detroit businessmen and organizations, M1 Rail, doesn't think the nine-mile-long, streetcar-style rail line between the city limit at Eight Mile Road and downtown, as proposed, is the best use of the funding, is financially sustainable or is the best layout and alignment.

The city's plan also fails to tie the line into any future regional mass transit systems, sources say, and that has M1 balking at financial assistance.

The $100 million is crucial because it's part of the $210 million in required local match money needed by DDOT to leverage funding under the Federal Transit Administration's New Starts program, which is aimed at partially funding qualified local transit projects such as rail. Washington would pay $318 million of the cost if the project's New Starts application -- expected this summer -- is approved.
Link to full story

And here's the link to our editorial on the topic, which is must-read: Click here

**stinkytofu** · July-10-11, 09:50 PM

Well, that's not good.

**Rocko** · July-10-11, 10:21 PM

The public overwhelmingly supported a center-of-street alignment. If the public doesn't ride the M1's proposed curb-side alignment, well that's not very sustainable, is it? Last I checked, no M1 members were regarded as experts on transit planning or operations. So maybe they should do what they do best, and leave the actual route planning to those who have some idea what they're doing. Curb-side from 8 Mile to Congress won't be sustainable.....it'll take longer and stop more frequently and aside from the core of downtown, that will be insufficient.

**brizee** · July-10-11, 10:22 PM

That's wonderful. You shouldn't pour your money into something you don't believe.

Like me. I can't wait to put at least 300 miles between me and this collection of short-sighted, foot shooting dickheads.

PS. I do hope they're sued for every cent wasted on planning, engineering and political capital just pissed on.

**BShea** · July-10-11, 10:27 PM

I don't think it's completely the median vs. curbside debate.

I've been told that the M1 investors were being treated as ATMs by DDOT.

M1 doesn't have faith in DDOT's plan to cover operation costs and doesn't like that there is no planning to make this part of a regional system.

Worrying about being linked to something that easily could become "People Mover 2.0" is a legitimate concern.

And transit insiders unaffiliated with M1 I've talked to largely agree with M1's concerns, and have expressed frustration over DDOT's performance with this project.

If you've angered Rip Rapson of all people, to the point where he's complaining to the Wall Street Journal, there's a problem.

**Fnemecek** · July-11-11, 09:41 AM

Originally Posted by BShea

I don't think it's completely the median vs. curbside debate.

I've been told that the M1 investors were being treated as ATMs by DDOT.

One thought that comes to mind is the operating costs. The current plan calls for $2 million per year from the CoD's general fund. With the budget being what it is, one has to wonder if they'l be able to meet that commitment and, if they can't, if M1 will be called on to bail the system out in another year or two.

**Detroitnerd** · July-11-11, 10:33 AM

Who's whose ATM? The backers who are putting up a one-time commitment of money that will come back to them threefold? Or the public, who will be on the hook for whatever plan is implemented? They feel like ATMs? Isn't that interesting. I think WE are the ATMs. As when Ilitch leveraged OUR money to build HIS stadium. [["We need skyboxes!") Or when we see our money go to unaccountable "authorities" that funnel money to demolition companies and skew our local skillset.

Another thing: When businesspeople talk about how they "feel" -- you can tell you are into some sort of PR quagmire. Businesspeople are supposed to be heartless assholes, aren't they? So when they start talking about their "feelings" you know you're about to see some serious BS.

**Melocoton** · July-11-11, 10:47 AM

Originally Posted by Detroitnerd

Who's whose ATM? The backers who are putting up a one-time commitment of money that will come back to them threefold? Or the public, who will be on the hook for whatever plan is implemented?

Exactly. And who said the investors were being treated like ATMs? They themselves?

**j to the jeremy** · July-11-11, 11:00 AM

Who wants to go protest outside of Compuware and Foxtown? I will.

I think crammero is right. The feds need to step in and demand an RTA. This solves all of our problems, and smoothes out all the spin machine BS that M1 is spewing right now.

The Feds have spoken, as well : http://www.crainsdetroit.com/article...rk-the-federal

Now, a personal letter to any M1 people reading this.

Dear M1 Rail,

If you are putting up a fraction of the startup costs of a transit line, or even building your own private line, you must follow federal guidelines. If they tell you you can't build a 3 mile people mover and you have to merge with a larger public plan which has been in the works for years, you have to do it. If the larger plan has already been designed to link up to the SEMCOG regional transit master plan, you have to go along with it. You can't claim it doesn't, just because you've spent the last three years trying to convince people that they would never get a regional system.

If the gov't folks at DDOT compromise with you, and even let you have redundant stops a block from one another near your headquarters, you can't get mad because the public you're "serving" doesn't want the trains in the bus lanes for 9 miles. Except you're not serving the public. DDOT is [[at least trying to) serve the public. You're serving your profit margins. That's ok, to a point, because you're all businessmen. But thing is, effective PUBLIC transit can't be built privately in the 21st century. Most of our cities' elites these days aren't that fond of the masses that ride buses and trains. They don't know much about effective regional planning because they went to business school, not planning school. How many of the M1 group have ever commuted by train to a regular job?

But if you want to hold a struggling city hostage, preventing them from getting over 300 million dollars of available federal funding, be my guest. Michigan recieves less than a dollar in return for every federal tax dollar we pay. That's because we can never agree on how to spend money if it doesn't pay someone off locally. So if you guys want to be the latest reason that Michigan can't get it's shit together, be my guest. We can go back to being the only major city in the continent without rail transit, and that SEMCOG regional plan that the DDOT light rail flows into, will probably never be realized.

Thank you for putting your own egos first, lest the people living in the city of Detroit actually get what they were promised.

**stinkytofu** · July-10-11, 10:27 PM

I'm not going to flip out until news comes out saying it's off...never to happen again. This could just be politicking.

**corktownyuppie** · July-10-11, 10:40 PM

I get the dissatisfaction. My question for you: Do you think they can resolve this conflict? Or is it really dead?

**BShea** · July-10-11, 10:47 PM

I don't think it's dead -- I think it's in serious jeopardy. The differences can be worked out, I'm sure. The immediate threat is that it could be delayed. The city doesn't have many options to replace that local-match money. One possibility is that because the Obama administration seems keen on sending money this way, something less than the 60-40 funding formula might be acceptable for the federal funding situation. Or the feds work out a deal to pay for the whole thing. I don't think either M1 or DDOT is interested in this failing or going idle, but it will take some serious work to solve this.

**Warrenite84** · July-10-11, 11:01 PM

IMHO, a curbside system north of I-75 to Grand Boulevard would make the LRT another People Mover.

I can only agree that the parties involved with setting up funding to run the system, the DARTA legislation not enacted or signed into law, should have been done long ago. A bona-fide intermodal station should also be part of this system at the plot south of the Amtrack Station on Woodward.

If these issues are solved and they still balk, I'd love to see Govenor Rick Snyder offer to use funding, [[maybe from federal match of bridge money?), to replace their committments and get this project started. [[It would be smart on the investors' part to offer up a bullet point list to the public stating just what their concerns are to defuse negative public opinion).

I believe that the city brought up very reasonable concerns concerning public safety and fire truck access to buildings that would be hampered by a curbside system.

**Jason** · July-10-11, 11:17 PM

I don't think it's realistic to expect a lot of regional planning at this point. I don't think many politicians in Oakland county are going to stick their necks out over the issue at least until construction has started.

Also, I think M1's role in this really is that of an ATM. They're a group of people who have a lot of their own money and are really good at raising more money. Those are their skills and that's what they're contributing to the project. I think they should be treated respectfully, and everyone should be very grateful, and people should know who's responsible for what, but M1's role in this is ultimately money.

And I think their PR people caught on to what people thought of their alignment preferences. Now they're trying to spin it like DDOT is pushing for People Mover 2.0, when it's the other way around.

**mwilbert** · July-10-11, 11:31 PM

I think they can resolve the conflict, and I even think they will resolve it, but the M-1 people are seriously confused if they think most of the concerns expressed in the Crain's article can be addressed by the city. What possible change could be made to the line to make it tie into a non-existent future regional transportation system? Where would the city get money to fund whatever operating deficit they are concerned about? The city isn't going to move the Milwaukee bridge, and curbside running doesn't really seem very viable anyway.

If the M-1 group isn't willing to help fund a project until there is a sensible regional transit plan and funding source and an authority to run it, that is [[to my mind) a reasonable position, but they might have saved everyone a lot of time and money if they had mentioned that a while ago. If they think they have a better idea of how the money they are supposedly willing to supply should be used, they might want to make a specific proposal, or a set of specific changes to the existing proposal. Then at least there could be some concrete discussion, as opposed to sniping. I'm sure that DDOT and the Mayor's office could and should have handled this relationship better, but at least DDOT has been following a defined, reasonably transparent process, and appears to have been trying to address at least some of the M-1 group's desires, and explaining their design choices. The M-1 group, not so much.

**casscorridor** · July-11-11, 01:06 AM

this is downright dangerous arrogance

Detroit needs new transit infrastructure now. The plan to fund it for the long haul can emerge later on. If we loose the federal money we might have to say farewell to a rail transit future and to major redevelopment of the Woodward corridor. This is our short window. There is wide consensus on the alignment and that it will be center-running. This is what transit experts tell us and can be proven by example after example. Curb-running streetcars are almost exclusively for dense urban cores, to supplement regional rail. We already have the people mover to do this. We need to build a regional rail system, and the Woodward line is the first step in that project. By waiting till the 11th hour to change deny funding, these rich businessmen are jeopardizing Detroit's very future. Now there is little time to find replacement funding, after three years of working with M1. The people of Detroit should protest outside Compuware/Quicken and outside City Hall and the Federal Buiulding and demand this rail line is built, regardless of long-term funding. Projects like these are what will bring back the city, but the private funders seem to want a toy train for their disneyland of sports stadiums, theaters, casinos and parking garages.

**BrushStart** · July-11-11, 08:11 AM

Originally Posted by casscorridor

this is downright dangerous arrogance

Detroit needs new transit infrastructure now. The plan to fund it for the long haul can emerge later on. If we loose the federal money we might have to say farewell to a rail transit future and to major redevelopment of the Woodward corridor. This is our short window. There is wide consensus on the alignment and that it will be center-running. This is what transit experts tell us and can be proven by example after example. Curb-running streetcars are almost exclusively for dense urban cores, to supplement regional rail. We already have the people mover to do this. We need to build a regional rail system, and the Woodward line is the first step in that project. By waiting till the 11th hour to change deny funding, these rich businessmen are jeopardizing Detroit's very future.

Well said, CC.

I find it interesting that Matt Cullen said this, "Cullen previously has said the group won't fund a project with which it disagrees. And those close to the situation have said M1 doesn't view DDOT's proposal as a "robust, sustainable transit project."

First, M1 said nothing UNTIL JUST NOW about creating a "robust" regional system. In fact, M1's plan only called for a street-car from downtown to New Center. Essentially, a 3 mile trolley. Why all of a sudden, is M1 saying that center-running rail from downtown to 8 Mile is not robust? Their position makes no sense given the context in which this whole plan emerged and has been understood by all involved. Point being, they knew full well what this is was going to be. To play dumb now is a complete cop-out.

On top of that, their plan for curbside rail through Midtown is completely stupid. Everyone knows it. I guarantee that the whole hangup is about accommodating Ilitch and his new area north of the freeway. The rest of those guys couldn't give a rat's arse about the alignment in Midtown. They don't even own anything over there. The reality is, light rail on Woodward is going to stoke the furnace of their enterprises.

EDIT: Alternatively, what I really hope is going on, is that M1's statement about creating a sustainable, regional system is designed to put pressure on Oakland County to get on board. In which case, this present scuttlebutt could merely be a clever maneuver. In which case, we may all be overreacting.

**bailey** · July-11-11, 08:41 AM

BShea
I don't think it's completely the median vs. curbside debate.

I've been told that the M1 investors were being treated as ATMs by DDOT.

yet another [[in a long list) reason why DDot should be taken over by a regional system.

**cramerro** · July-11-11, 07:44 AM

IMO this points to an underlying problem that I thought would be fixed what LaHood came to town last year, or many times since then. This project should not allowed to be done by M1-Rail [[achieved), and should not be allowed to be done by DDOT. The Feds and State have a key opportunitiy here to hold the $300M+ hostage until there is a RTA. Period, end of story [[and to elaborate, an RTA does not have to require a merger of DDOT and SMART). Federal funding is the #1 way to get things done in government because they hold a purse the size of Lake Superior.

100% of the fixed guideway money this region recieves since UMTA was formed [[not counting People Mover) and for who knows how many years to come should NOT be handed over to a transit agency that serves one city, keeps cutting service, and is financially unsustainable [[not to mention funded to a large extent by a city on the brink of having a financial manager in place who have budget squabbles over money like they're bartering for baseball cards).

Center running, curb running, whatever... I think these business leaders are smart to hold the line on what they think will be good for the corridor. They're in business - successfully - and know how to compromise. They are NOT going to tank the whole thing just becuase they can't get thier curb running system or their egos are too big - they have more investment of time, money, and employees riding on this than most.

When the project was just to GB and paid for privately, I could see it being done by M-1, with little input from outside the corridor. When the City turned the screws on M1 and hijacked the project to make it the whole Woodward corridor, including lauding it as the first phase in the RTCC regional plan, the ante was upped and regional input, governance, and coordination became a must. DDOT can easily screw this up, even if they get the money. This needs to be done right.

**dtowncitylover** · July-11-11, 11:44 AM

I know Mr. Shea is on here [[who started this thread?), but I think his last point in the editorial is moot. He makes it seem like BCBS and GM/RenCen are miles and miles away and would be totally inaccessible from the transit line. Sorry, but if you want to save gas and keep your car longer, then you're gonna take the train and WALK. I know it is not the norm in Detroit to walk [[usually there's some driving done beforehand), but we are going to have to learn how to walk...what?....5 BLOCKS!!! OH NO!!! This downtown Detroit, not downtown Chicago or Manhattan. You can walk from 375 to the Lodge or from Jefferson to the Fisher in less than 20 minutes. And the weather? Give me a break, carry an umbrella or get some boots, not that hard.

**Hypestyles** · July-11-11, 12:13 PM

more reason for me to be more depressed than ever about the state of affairs for Detroit and vicinity...

..how much sway.. if any at all.. would Snyder have if he were to call a "work it out or else" meeting with 'the Big 4' on an RTA agreement, also the M1 group..

**professorscott** · July-11-11, 12:28 PM

Originally Posted by Hypestyles

..how much sway.. if any at all.. would Snyder have if he were to call a "work it out or else" meeting with 'the Big 4' on an RTA agreement, also the M1 group..

Quite a bit, I'd think. I'm not sure this will get to the top of his list of things to do, but if it does, he can be quite influential among both groups.

I find it encouraging that Mark Hackel said the other day he didn't want an RTA solution to be considered without Macomb County's input. That means Macomb County has some interest in what happens here. The "poles" here are Detroit and Oakland County; if you can find a solution that Detroit doesn't hate and Oakland County doesn't hate, you'll probably have something that Wayne and Macomb Counties can live with as well.

By the way I think an RTA with operating authority would make a lot of the M1 Rail folks' objections go away. [[By the phrase "with operating authority" I mean an RTA that would supersede DDOT, SMART and the PeopleMover organizations and operate the transit itself. I don't think an RTA which just sits over the top of the three existing agencies would accomplish anything whatever.)

**BShea** · July-11-11, 12:37 PM

And keep in mind that the original organizer of the M1 consortium, John Hertel, is the guy that shepherded the regional plan -- which DDOT basically killed because it didn't want to lose any of its funding to the suburbs.

The M1 plan, when it was just its small demonstration line, had state funding approved by the Legislature, and set up a street railway board, etc.

None of that is arranged for the DDOT scheme.

**pswingset** · July-11-11, 11:47 AM

Jeremey, Count me in.

**Detroitnerd** · July-11-11, 11:51 AM

There is much reason to criticize DDOT's management of Detroit transportation, sure. When was the last time the department had an actual citywide plan for its bus service? Then again, it also faces a constant stream of cuts and is a political football in the latest games of mayor-vs.-council brinksmanship. Yet, it is a public agency, ultimately accountable to the public. I was glad they asked for comments and wanted input and seemed to act upon it.

As for our local business leaders, we've seen this game before. It's all well and good to spin it back against City Hall, but the man on the street knows better. He knows that our "business leaders," now so upset with the city, have been key manipulators of the system when it benefits them. Past examples include Ilitch putting taxpayers on the hook for his new baseball park, quietly looting the fund to protect the old one and then having taxpayers pay for the demolition of the old park [[and, presumably, salting the earth so nothing may grow there). We've seen their proxy DEGC wade through downtown like a Godzilla on a rampage, engaging in illegal demolitions. The truth is that our local business leaders don't question or oppose Detroit's incompetence in government; likely, the better to lead the bull by the ring in its nose, they see an opportunity to game the system to their advantage.

So, on one hand, sure, there are likely plenty of cogent criticisms you could lob at City Hall. And we shouldn't deny them. But anybody who didn't just fall off a turnip cart at Mack and Russell knows that, at the end of the day, it's Chinatown, right? The business leaders will whine and complain, spin things through their proxies and vessels, and get what they want and make us pay for it. As they always do.

Or will it work this time?