Governors

Transporta/on Finance Advisory Commi8ee

While the exis/ng transit system is ecient and cost-eec/ve, it is undersized and needs to expand to make the region's projected economic growth a reality. Regions with robust transit systems work be8er and are choice des/na/ons for employers and employees. Uncertainty in transit development delays private investment. To remain compe//ve and a8ain regional economic goals, the Twin Ci/es must con/nue to strengthen its transit system. www.dot.state.mn.us/Qac/

The benets of a TFAC- recommended transit system: Minneapolis and Saint Paul
Todd Klingel

Today Transit gets people to work

80% of riders going to work or school 40% of downtown Minneapolis
US Bank: 50% Ameriprise: 60%

Today and tomorrow We need transit to compete for workers

4

Transit makes possible a region that draws workers and jobs

Companies are recrui/ng and targe/ng the next genera/on of talented workers, the Genera/on Y/millennials who increasingly prefer urban lifestyles with mass transit.
Urban Land Ins/tute
Source: Jerey Spivak, Urban Oce Momentum, Urban Land, September 14, 2011

Other regions know this

6
Maps to same scale Source: Bill Rankin, McKinsey team analysis

And are benegng from their investments

Denver:
#1 Des/na/on for Millennials Minneapolis: #39 Mayor Hancock: Theyre coming for transit.

A thriving region is a product we are making. Transit is a necessary component. If we put in too li8le, well get a less compe//ve product.

The benets of a TFAC- recommended transit system: Southwest LRT

Judy Johnson

SW LRT Transporta)on to serve and connect job centers Transporta)on*for*SW:*serves*and*connects*job*centers*

Downtown& Downtown& Minneapolis& Minneapolis& 147,000 147,000&emp.*

Beltline&Business& Park&

6,000
Methodist& Hospital&

West&Calhoun&

4,200

5,200
KFTel&Drive& Industrial&Park&

3,500
Opus&& Business&Park&

East&End&Hopkins& (Cargill,&Supervalu)&

Excelsior&&&Grand& Park&Nicollet&

1,000

5,000 11,000

Golden&Triangle& Business&Park&

18,000
Highway&212& Corridor&

16,000

Jobs&within&& Fmile&of& staVon&

Neither more roads nor more buses work in this case.

10

SW LRT Supports job growth

Comcast Customer Loyalty Center Could go anywhere in the country Workforce needs transit

Southwest: 2000: 210,000 jobs 2030: 270,000 jobs

UnitedHealth Group 4 new towers 6,600 new employees

11

12
h8p://www.twinci/es.com/opinion/ci_20489679/klingel-kramer-southwest-twin-ci/es-needs-light-rail

Question: The Twin Cities currently has one operating light rail line and a second line, between Minneapolis and St. Paul, is under construction. In order to move forward with the next planed extension to the system the Southwest Light Rail Line that would extend from Minneapolis to Eden Prairie the state would dedicate $118 million in order to secure $625 million in federal matching funds. Do youQues/on: The Twin Ci/es currently has one opera/ng light support or oppose dedicating these funds? and a second line, between Minneapolis and St. rail line
Paul, is under construc/on. In order to move forward with the next planed extension to the system the Southwest Statewide: 70% ould extend from Minneapolis to Eden Light Rail Line that w support, 27% oppose, the state 3% Prairie 625 million iould dedicate $118 million Dn oyrder to undecided. w n federal matching funds. i o ou secure $ support or oppose dedica/ng these funds? Metro1: 75% ssupport,o23% 3% undecided. oppose, Statewide: 70% upport, 27% ppose, 2% undecided. Metro1: 75% support, 23% oppose, 2% undecided.

Voters agree

Support funding for Southwest Light Rail Statewide

2012: 61%
Metro

2013:

70% 75%

2012: 64%

2013:

13

h8p://www.minneapolischamber.org/news/2013/01/17/mrcc-featured/poll-shows-strong-support-for-transit-funding/

3. There is overwhelming statewide voter support for funding the Southwest Light Rail. Seventy percent of voters statewide and 75% of voters in the seven-county metro region support dedicating $118 million in state funds to move forward with the Southwest Light Rail line.

The benets of a TFAC- recommended transit system: The region and the state
Will Schroeer

14

Would transit investment be worth it here? Regional Transit System: Return on Investment Assessment
15 www.theitascaproject.com/Transit%20ROI%20exec %20summary%20Nov%202012.pdf

Itasca asked 3 ques/ons

1. A built-out regional transit system would require substan/al investment. What would be the return on the regional 2030 transit plan? 2. Investments can be made more or less quickly. Would accelera>ng build out to 2023 change the ROI? 3. Many communi/es developing transit system experience more growth near transit sta/ons. Would such expecta>ons for growth change the return on investment?

16

We calculated six kinds of direct impacts

1. 2. 3. 4. 5. 6. Vehicle opera/ng costs Travel /mes and travel reliability Shippers and logis/cs costs Emissions Safety costs Road pavement condi/ons

Costs for each scenario = capital + opera/ons & maintenance

(Metropolitan Council )

17

Direct Benets
Compared to base case scenario 2010 $ Millions Total direct impacts Scenario 1 2030 Regional Plan 2 Accelerated Regional Plan 3 2030 Plan with more growth near sta/ons Investment $4,361 $5,289 $4,361 Low $6,571 $10,762 $9,082 High $10,083 $16,516 $13,927 IRR* 7.8 14.8% 11.2 18.0% 13.0 20.9%

Note: Benefits and operating and maintenance costs are calculated for 15-year period 2030-2045 for regional system, 2023-2045 for accelerated system. All are reported in 2010 dollars. *IRR = Internal Rate of Return, the discount rate often used in capital budgeting that makes the net present value of all cash flows from a particular project equal to zero

18

The benets of regional transit far outweigh the costs

Building the 2030 regional plan =

$6.6 10.1 billion in direct benets, on a $4.4 billion investment.

Accelera/ng the system build-out would increase direct benets:

$10.7 16.5 billion on a $5.3 billion investment

2030 regional plan with growth near transit sta/ons would
increase return on investment by $2 - $4 billion
19

Transit build-out increases access to jobs

Building the regional transit system would enable employers in the 20 region to access 500,000 more employees within a 30-minute commute. (a 22-25% increase)

The public understands this, and wants more transit

Statewide 79% agree Minnesota would benet from having an expanded and improved public transporta/on system, such as rail and buses. 66% agree I would like to use public transporta/on such as rail or buses more ozen, but it is not convenient or available from my home or work. 83% support the State of Minnesota inves/ng more in public transit improvements to ease trac conges/on and provide more transporta/on op/ons. This includes a solid majority of Republicans (71%), Democrats (95%), and Independents (80%).

21

Survey conducted in January 2013 by FM3 and POS for Minneapolis and Saint Paul Chambers.

Construc/on creates jobs for the whole state

Union Depot Track Work

Home of Central Corridor construc/on workers

22