The Regional Transit Authority (RTA) is developing a 4.7-mile streetcar project in downtown New Orleans. The Canal Streetcar Spine would extend along the median of Canal Street from the Canal Ferry at the Mississippi River in the Central Business District through the Mid-City neighborhood to two outer termini at the Cemeteries and City Park/Beauregard Circle. The capital cost estimate is $154.0 million (escalated dollars). Ridership is estimated to be 31,600 passengers per day for the forecast year (2015).

The overall project rating applies to this Annual New Starts Report and reflects conditions as of November 1998. Project evaluation is an ongoing process. As new starts projects proceed through development, the estimates of costs, benefits, and impacts are refined. The FTA ratings and recommendations will be updated annually to reflect new information, changing conditions, and refined financing plans.

RTA completed a Major Investment Study/Alternatives Analysis of the Canal Street corridor in March 1995. The Regional Planning Commission, the Metropolitan Planning Organization for New Orleans, has included the Canal Spine and Carrolton Spur to City Park in the Transportation Plan and Transportation Improvement Program. The Federal Transit Administration (FTA) approved the initiation of preliminary engineering (PE) and the preparation of a Draft Environmental Impact Statement (DEIS) in September 1995. The DEIS was published in March 1997 and the Final Environmental Impact Statement (FEIS) was published in July 1997. FTA issued a Record of Decision for the project on August 28, 1997. The RTA initiated Final Design on the Canal Streetcar Spine in September 1997.

TEA-21 Section 3030(a)(51) authorizes the New Orleans Canal Streetcar project for final design and construction. Through FY 1999, Congress has appropriated $54.21 million in Section 5309 New Starts funds for this project.

The following criteria have been estimated in conformance with FTA’s Technical Guidance on Section 5309 New Starts Criteria unless otherwise indicated. N/A indicates that data are not available.

Annual travel time savings have not been estimated consistent with FTA’s New Starts Technical Guidance.

Based on 1990 Census data, there are an estimated 8,522 low-income households within a ½ mile radius of the line’s proposed stations, approximately 55 percent of the total households within a ½ radius of proposed stations.

The New Orleans metropolitan area is an attainment area for carbon monoxide and a maintenance area for ozone. RTA estimates the following annual emissions reductions.

RTA estimates that in 2015, the Canal Streetcar Spine project will result in the following savings in regional energy consumption (measured in British Thermal Units – BTU):

Values reflect annual BTU reductions.

RTA estimates a decrease in the systemwide operating cost per passenger mile in the year 2015.

RTA estimates the following cost effectiveness indices:

The project’s Low-Medium rating reflects the lack of transit-supportive land use policies and plans along the corridor, particularly outside of the CBD. The downtown and historic district portions of the corridor are relatively dense with mixed-use development, high trip generators, and a pedestrian friendly environment. Densities are lower in the outlying areas of the corridor while land use along the City Park Spur is only minimally transit-supportive. Land use policy changes are under consideration for the CBD. In 1999, the City of New Orleans plans to complete a new master plan, which may include policies to increase the density of development in many older areas, such as the Canal corridor, and to encourage vertical zoning (residential atop commercial). The city is relying on improved transit access, a pedestrian friendly environment, and high-density, mixed-use zoning to attract development to the CBD. The City’s Comprehensive Zoning Ordinance requires parking caps for new development in the CBD. There are no local or regional growth management policies or plans to increase densities or transit supportive conditions outside the CBD. Specific corridor and station-area plans have not been developed. Discussions about possible joint development opportunities at the Cemeteries Terminal have been impeded because RTA does not own property suitable for development and because of the built-up nature of the corridor.

The project’s financial plan proposes to utilize $123.2 million (80 percent) in Section 5309 New Start funds, $24.1 million (16 percent) in State funds and $6.7 million (4 percent) in local and other funds.

The Low-Medium capital plan rating reflects the lack of confirmation of a firm local funding commitment to the project. The State’s $24.1 million contribution to the Canal Streetcar Spine is included in the State Capital Outlay Budget and backed by General Obligation bonds. Although the project is in Final Design, RTA did not provide independent confirmation of the local financial contributions that include right-of way donations by the City of New Orleans and material donations by local citizens. RTA plans to provide revenues from its projected operating surplus for use as a capital match for the project, but recent budgets or audited financial statements were not available to verify the current financial state of the agency. The 20-year capital plan appears balanced, although it does not include a contingency plan in case the full amount of anticipated Federal funds is not available. Project costs have increased by 12 percent since November 1997 (from $136 million to $154 million).

The project’s Low-Medium operating plan rating reflects that although RTA experienced a balanced operating cash flow in 1997 and 1998, the agency operated in a negative operating funding situation from 1993 through 1995. The rating also reflects declining ridership in recent years and questionable fare revenue expectations. The agency proposes to cover RTA’s portion of project costs through a projected operating surplus. Revenues are expected from farebox recovery (projected to be approximately 40 percent of total operating costs), a local sales tax, State funds and charters, and other investment incomes. Annual ridership decreases (6.5 percent from 1990 through 1996) may present challenges to fare revenue expectations that are projected to increase at an average annual rate of 3.2 percent. RTA indicates that it has initiated an aggressive cost reduction program. Operating expenses declined by 7 percent in 1996. RTA projects operating and maintenance costs will increase at an average rate of 3.0 percent from 1997 through 2017, which is consistent with the 2.7 percent average annual rate of increase demonstrated between 1991 and 1996. Retail sales tax sources, which contribute about 50 percent of operating funds, appear stable and the anticipated growth rate of 3.8 percent is consistent with historical trends (5.9 percent).