Good Public Transit

Cotton Belt Debt Issuance Fails to Pass DART Board

As Dallas support shifts away from sprawling light rail system, the future of the $1 billion project is in doubt.

After a long, grueling, frank, and often contentious meeting of the Dallas Area Rapid Transit board this morning, a resolution that would have seen the agency take out $1 billion in low-interest, federally backed loans to pay for the Cotton Belt light rail extension failed to receive the two-thirds majority support necessary for approval.

The vote leaves in doubt the future of the long-awaited light rail line, which would extend east from Plano, through the northern suburbs and parts of Dallas, toward DFW Airport. Cities such as Addison have been pushing for the rail line to be built for decades, but critics argue it would not produce ridership sufficient to justify its costs and would direct resources away from fixing DART’s inefficient transit system.

Today’s meeting was specially called to reconsider the motion that failed to pass at the last DART board meeting. The meeting also came a day before the Dallas City Council is set to vote to replace upwards of seven of its representatives on the DART board, potentially remaking the character of the body that governs the region’s public transportation system.

Suburban DART members openly expressed their fears at today’s meeting that new Dallas representation would no longer be committed to pursuing their priority projects, like the Cotton Belt. In a Dallas City Council transportation committee meeting held two weeks ago to interview new DART board representatives, only three of 14 nominees received the full support of the committee, and of those who did, most spoke of a desire to refocus DART’s efforts on bus service and overall system ridership and reliability, rather than continuing to build expensive light rail extensions that have not been able to reverse a downtrend in ridership.

Today’s meeting’s final moments were the most dramatic of a lively session overall, and they well-illustrated the stakes of the decision.

Speaking in support of the Cotton Belt line, Dallas DART board representative Pamela Gates read from a prepared statement, citing her fears that a vote against issuing the Cotton Belt debt would result in some of the suburban member cities holding referendums to pull out of the regional transit agency. The loss of sales tax revenue, Gates argued, would most burden those low-income residents, particularly those living in the southern sector who rely on DART to get to jobs, school, and medical appointments.

“I will vote for these taxpaying citizens,” Gates said. “I vote for an intact DART and voting against the risk of a crippled DART.”

But the nightmare scenario Gates described — a crippled public transit system in which residents have to endure the burden of impossibly long commutes and little access to employment or opportunity — sounded very much like DART as it exists today. In its 30-year blitz to build out the nation’s longest light rail network, DART has created a public transit system that is inefficient and unreliable, a system that has contributed to Dallas’ enduring struggles with upward mobility, high rate of neighborhood income inequality, and a burdensome cost of living when transportation costs are taken into consideration.

Also, to vote for the Cotton Belt out of fears that not supporting the project would result in the loss of DART member cities, and the sales tax revenue they represented, laid bare the kind of horse trading by which decisions about public transit are made by the DART board, pursuing ever more light rail extensions often at the cost of building a system that could increase ridership and improve mobility throughout the region.

This was on full display this morning. Representatives of Dallas and the suburban cities expressed their distrust in each other’s commitment to either the Cotton Belt line or the eagerly sought second downtown subway alignment, called D2. Suburban cities feared that a delay in the vote of the Cotton Belt debt issuance was just a backhanded way of stifling the project. Some Dallas board members feared that committing the agency to a billion dollars of debt could result in over-stretching DART’s borrowing capacity and hamper its ability to deliver on D2.

Specifically, Dallas rep Sue Bauman wanted to know from DART staff how the agency would fund D2 if the federal grant program DART is seeking to fund half of the cost of the proposed downtown subway is eliminated by the Trump administration. She also wanted assurance from her fellow board members that they would continue to support a downtown subway in return for support for the Cotton Belt.

Even though the agenda only called for a discussion of the Cotton Belt debt issuance, Garland, Rowlett, and Glenn Height’s board representative Mark Enoch invited DART CFO David Leininger to address the board and answer questions about how DART might fund D2 if the federal grant opportunities were eliminated. Leininger had a presentation prepared for the occasion.

The challenge, Leininger explained, is that if DART issued $2 billion in debt to build both the Cotton Belt and D2, the transit agency could begin to run out of cash in the mid-2020s. To solve this potential insolvency, Leininger proposed to pay for D2 by issuing $650 million in Capital Appreciation Bonds, which would push out DART’s requirement to pay debt service on the loan until the 2030s.

“Is it legal? Yes,” Leininger said of the CABs. “Are they dangerous? They can be.”

Not only would CAB funding increase the amount of interest paid on the loan for D2 and push the debt obligation out into the far-off uncertain future, funding both the Cotton Belt and D2 with debt would limit DART’s capacity to pursue other transit improvements, including an improved bus network.

To the suburban representatives, Leininger’s presentation answered what, in their minds, was the question that was causing the Dallas DART board members to drag their feet on the Cotton Belt vote. Could DART afford to build both the Cotton Belt and D2? Technically yes, Leininger explained. But that was not enough to sway the five Dallas DART board representatives needed to commit to locking DART into a $1 billion loan to build a new light rail line whose projected return on fare revenue would only be a small fraction of that amount.

In the end, board members Sue Bauman, Patrick Kennedy, Michele Wong Krause, and Amanda Moreno voted against the resolution, joined by Dallas and Cockrell Hill representative William Velasco.

Where today’s vote leaves the Cotton Belt project — as well as D2, and the entire future of the public transit system — is yet to be seen. Changes in representation, ongoing feuding between suburban and urban board representatives, and a desire to shift the focus of the transit agency from building light rail lines to providing reliable and usable public transit create the potential for stalemate on the board.

For now, DART says it will continue to look into funding sources and options for D2 and the Cotton Belt. In other words, as always, DART staff plugs on.

Comments

  • Danelle Ericson

    It’s not light rail tho as mentioned in the article. It’s diesel, something similar to the Denton A train.

    • Candy Evans

      Exactly. Re-think it along perhaps that abandoned line along Inwood Road, and put a station at Midtown.

      • kduble

        While your concept has merit, moving such an idea to the forefront wouldn’t be fair to our northern partners. They’ve paid into the coalition for decades on the hope of someday getting service to the airport.

        • dallasmay

          They don’t care about service to the air port. They just want a pretty photo of a train for their Chambers of Commerce to put on their websites. Give them each a pretty streetcar circular. It’ll serve their wants and likely get more riders.

          • kduble

            Sorry, Dallas, I’ll have to disagree with you here. A Cotton Belt station would be a natural fit for business hotels and conference centers. We’re seeing a lot of compatible development at LRT stops outside the Dallas city limits (example Las Colinas convention center).

            It’s mainly Dallas which allows land around rail stations to be taken by Kroger (Mockingbird), Office Depot (Lovers Lane), Home Depot (Forest), storage buildings (Cedars, and along the Green/Orange corridor). It was the neighborhood, not City Hall, that prevented a Sam’s Club from going up at Cityplace.

          • Mavdog

            Your comment that “Dallas…allows land” is odd to say the least.
            Are you proposing that Dallas should have used eminent domain to force these businesses out? Kroger at Mockingbird opened 2 years before DART rail service started, Office Depot opened at Lovers a year before, and Home Depot on Forest 6 years prior to DART rail.
            Explain how a total projected ridership of 16K plus makes financial sense…the Cotton Belt should not be prioritized over the resolution to the downtown Dallas traffic issue (D2).

          • Ken Duble

            I’ll give you points for Home Depot, but not for the other two. We’d known since the early 1990s there’d be rail on that corridor. Planning means exactly that. We didn’t wake up one morning and find the red line under our Christmas Tree.

          • Mavdog

            The developments you point your finger at had the entitlements in place when they were built, there was no change in zoning that was needed for their opening for business.

            You appear to support the idea that the City of Dallas should have forced a change in zoning on property owners along the DART rail routes in pursuit of a TOD fantasy. First, that is a mine field of potential litigation involving economic taking; second, it is a City Hall that is attempting to centrally manage the real estate market which never turns out well; and third, that is 180 degrees from your suggestion below to “let the market sort things out”. Are you actually supportive of the market or against its natural progression?

            These businesses provide goods and services to a community that clearly wants and needs them. You are free to turn your nose up at these “big box retailers” and preach that Dallas would be better if they weren’t there. However tens of thousands of Dallas residents who are customers would disagree.

          • Ben Reavis

            Las Colinas CC was not a product of the DART line. They planned the location and forced DART to adjust their intended alignment for the Orange Line.

          • Ken Duble

            That’s what Dallas should have been doing — maximizing potential.

          • Ben Reavis

            I think the potential is maximized by creating an efficient comprehensive transit system. Chasing future development is not worth sacrificing the quality of the system for current ridership. It takes an hour to get from downtown to DFW on the Orange line. That is more than double the time required to drive. Even at rush hour it has never taken me longer than 45 min to make the trip.

          • Ken Duble

            I realize the orange line isn’t a quick trip from downtown to the airport. But with a top speed of 65 mph and frequent stops, that’s the nature of the beast. This is the downside of having the nation’s longest LRT network. LRT is designed for quick stops and starts for surface stations close together in a congested area. Atlanta and DC opted for 79-mph heavy rail and a largely underground system, but the public here was unwilling to authorize long-term debt back in the 80s, and they insisted on a pay-as-you-go system, with no bonds out more than five years. This was DART’s original sin.

          • OxbowIncedent

            (Mockingbird) A station connected to retail and housing as well as SMU, not just Kroger. (Lovers Lane) connected to Meadows building, upper Greenville, SMU, etc. Ill give you Forest Lane, although its near Medical City, but that is where the previous line existed when they built over it. The Cedars is up and coming with Millennial residents who actually USE the rail system, as opposed to ANYONE in Addison. Its a fair argument that the suburbs have paid into DART, but they are getting bus service which is still underutilized by Addison. Why would the Cotton Belt be any different right now?

          • Ken Duble

            Everything on the west side of the track at Mockingbird is wonderful. It’s the east side that’s a waste.

            “The Cedars is up and coming with Millennial residents who actually USE the rail system, as opposed to ANYONE in Addison.”

            Could this be because Addison has no rail system to use?

          • OxbowIncedent

            The East side is a freeway paralleling the line. Isn’t that an ideal location?

            Take DART Rail out of the equation and Addison still doesn’t utilze the DART services it has like Dallas does right now. Nobody is saying NEVER build the Cottonbelt, just follow the priority needs first.

          • Ken Duble

            Cotton Belt is a priority for Addison, just not for Dallas. Hence the rub: The D2 activists are saying DART would take on too much debt and that pursuing both projects would impact carrying capacity and lower our bond rating. However, if Addison were too leave, that would also negatively impact our ratings. Investors would see a reduction in revenue, and potentially a further loss if other communities were to follow.
            A more prudent path would be to slow-growth Cotton Belt. Purchase a half-dozen Statlers, and operate them from Plano 12th Street to DFW, 6 days a week, at 2-hour intervals. The only stops would be Cityline Bush (Red Line), Addison Transit Center, and Downtown Carrollton (Green line). DART would then cap debt payments.
            A cap wouldn’t mean debt couldn’t increase at all. Rather, it would mean total debt would be a percentage of revenue, and revenue reflects population and economic growth, and inflation. Also, debt is constantly being retired — bonds mature all the time. As it expires, new debt can be taken on to replace it, less or more depending on rate environment. But, with the exception of platform lengthening, our system is largely built out. As DART retires old debt, it could take on new debt to upgrade Cotton Belt, and to improve bus service.
            DART’s approach should reflect the slogan of the Remain team: Better Together!

        • Candy Evans

          Well they can it would run along LBJ and then north. I just think we need to take a deeper look.

          • Mavdog

            Your point is valid: the current DART rail system does not serve some of the highest density employment clusters in the DFW area, specifically along the DNT (from Preston Center to Frisco…think about that!) or along LBJ. The number one use of mass transit is to get to and from work and the DART spoke layout does not provide this opportunity to hundreds of thousands of DFW workers.

        • Danelle Ericson

          If they were to rethink an outdated plan, and move the line where it will get more ridership and benefit everyone in a more powerful way, say along GBush or LBJ, it can still connect Addison to Richardson to Plano. The current route is not optimal in gaining the most ridership. They could gain more riders along GBush or LBJ for the east/west line.
          Then in the future, if they would take the line up north on the tollway to 121, that is what will be impactful and useful in public transportation. To me anyway.

        • Ken Duble

          A lot of the thinking here is exactly opposite mine. People are saying, let’s put rail where all the density is — a costly and complex proposition. I’m saying, let’s remove those parking regs around rail stops and put density there. It’s a higher return on public investment than storage centers.

          • Danelle Ericson

            DART already has the rights and space along LBJ. When they expanded it, they left space should DART ever want to use it. But since it’s logical and they could bring in more revenue from the higher ridership, they won’t do it.

          • kduble

            If ROW remains, that’s a good thing. But once again, I question the conventional wisdom of thinking we need to prioritize rail in an area built to accommodate cars. The elements which maximize the number of cars a corridor can accommodate tend to make it a hell for transit users. Better to priortlitize service to older, denser and more urban areas, as well as areas which have yet to be built out which we can shape to accommodate transit.

            Prioritizing rail in areas like LBJ would provide us more of what we have now — a rail system which is difficult to access and lacks relevance to people’s lives.

  • kduble

    A few random thoughts:

    Ms. Ericson’s observation below is correct. Cotton Belt service would involve the type of clean-diesel, Swiss-made Stadler vehicles currently terminating at the Convention Center in downtown Austin.

    The board is wise to be cautious. Transportation policy is currently subject to the president’s whim, with no discernible philosophy guiding decision-making.

    Two lesson’s emerge from Houston’s experience of creating a more efficient bus system: 1) Reinventing bus routes needn’t be the alibi for defunding Cotton Belt, as Houston showed it could be done at no net cost, and 2) less encouraging is the fact Houston’s ridership didn’t increase.

    While bus advocates promote moving away from hub-and-spoke and toward grid, Cotton Belt actually supports this.

    City Hall has only itself to blame for light rail’s disappointing ridership. For decades, City Hall has done a poor job of directing development around rail stations. City Hall has looked the other way as land around stations has been relegated to such incompatible uses as big-box retail and storage buildings.

    Although city hall reduces parking requirements around rail stations by 50%, even this is burdensome. A bicycle repair shop has far less need for parking than an auto repair shop and assumes a smaller footprint, but it also generates less revenue. Minimum parking standards around rail stations raises the cost of doing business. This, in turn, prices out such uses that are otherwise complementary to rail stations, such as day care, flower and card shops, shoe repair, hair salons and dry cleaning.

    If the city were serious about an efficient rail system, it would remove all minimum parking within a quarter-mile of each rail station and within a block of a streetcar track, then let the market sort things out.

    • Jim Schermbeck

      Sorry, no such thing as “clean diesel,” or “clean coal”….

      • Ken Duble

        I, too, would prefer electrification, Jim, but there are no visible emissions on these things. They run right down the street in Austin and are far cleaner than the surrounding 18-wheelers, and they’re certainly cleaner than all the vehicles they displace. And who’s to say they won’t be replaced in 40 years with fuel cell, or some other new method of propulsion?

  • dracphelan

    If DART wants to increase ridership, they need to increase security on the trains and at the stations. I used to use DART rail to commute to work. But, I got tired of the panhandlers at the stations, seeing people have their property stolen if they didn’t hold onto it tight enough, and the crazy people routinely screaming their rants as they ride the train through downtown.

  • Lolotehe
  • JoeBl

    This has very much turned into Suburbs vs City with stereotypes and myths floating around.

    What’s funny is how much this may end up resembling the Dallas “old way” and folks opposing the Cotton Belt don’t even know it.

    “Also, to vote for the Cotton Belt out of fears that not supporting the project would result in the loss of DART member cities, and the sales tax revenue they represented, laid bare the kind of horse trading by which decisions about public transit are made by the DART board.”

    As opposed to the old Dallas way which is to strong arm everyone and that appears to be what the board will do if Dallas replaces its members.

    • Ken Duble

      Horsetrading, logrolling, earmarking, whatever one wants to call it — it’s about getting things done. We’ve entered a phase in which the only worthy perception is one’s own, and anyone with a different perspective is a moral reprobate. We’ve gone from LBJ to Newt Gingrich, and government no longer functions.