A Streetcar Not Desired: Property owners sue to derail long-awaited railcar project | Crain's Sacramento

A Streetcar Not Desired: Property owners sue to derail long-awaited railcar project

  • Construction of a $200 million streetcar line that links downtown Sacramento to West Sacramento is set to begin in 2018. But a lawsuit by commercial property owners could delay that effort for several months or more. | Image courtesy of Sacramento Area Council of Governments.

    Construction of a $200 million streetcar line that links downtown Sacramento to West Sacramento is set to begin in 2018. But a lawsuit by commercial property owners could delay that effort for several months or more. | Image courtesy of Sacramento Area Council of Governments.

  • The Downtown/Riverfront Streetcar route (in purple) will have 22 stops, from the Sacramento Convention Center to West Sacramento’s City Hall. It will also require construction of two additional light rail stations, realignment of the K Street track and a five-block extension of the H Street line. | Courtesy of Downtown Riverfront Streetcar Project

    The Downtown/Riverfront Streetcar route (in purple) will have 22 stops, from the Sacramento Convention Center to West Sacramento’s City Hall. It will also require construction of two additional light rail stations, realignment of the K Street track and a five-block extension of the H Street line. | Courtesy of Downtown Riverfront Streetcar Project

  • Construction of a $200 million streetcar line that links downtown Sacramento to West Sacramento is set to begin in 2018. But a lawsuit by commercial property owners could delay that effort for several months or more. | Courtesy of Downtown Riverfront Streetcar Project

    Construction of a $200 million streetcar line that links downtown Sacramento to West Sacramento is set to begin in 2018. But a lawsuit by commercial property owners could delay that effort for several months or more. | Courtesy of Downtown Riverfront Streetcar Project

Businesses and residents in downtown Sacramento and West Sacramento have been waiting more than a decade for completion of the Downtown/Riverfront Streetcar Project. They may have to wait a bit longer.

In an effort to block the recently approved 3.3-mile railcar route that would link the two cities, three local property owners have filed a lawsuit in Sacramento County Superior Court against the City of Sacramento. The suit contends that a user’s tax passed by Sacramento voters in June was illegally conducted and is therefore unconstitutional.

According to Steven Bourasa, transportation committee chair of the watchdog association Eye on Sacramento, ballots for the Mello-Roos, or targeted district, tax – which will generate $50 million toward maintaining the $200 million streetcar project 25 years after its completion – only went to 300 commercial property owners along the project’s planned route through Midtown and Downtown. That tax proposal appeared as Measure S on the June ballot and was approved by 78 percent of voters, according to the Sacramento City Clerk’s office.

Legally, two-thirds of all registered voters in Sacramento needed to approve the tax for it to be valid, Bourasa says. “By cherry picking voters and egregiously gerrymandering the district, city officials assured themselves that they would secure the [apparent] majority vote needed to pass the tax,” he notes.

The suit seeks to have the tax invalidated until a new vote shows approval by at least two-thirds of all Sacramento voters. The tax is set to be implemented when the project is finished by 2021.

The Sacramento City Attorney’s office says it has no comment about the lawsuit at this time.

Plaintiffs in the case are Horizon Capital Investments and William Gekakis, two property owners within the district. The third, Sacramento resident Delphine Cathcart, lives outside the district, according to the court filing.

More legal matters

Supporting documents to the court filing also note that Howard Jarvis Taxpayers Association President Jon Coupal advised Sacramento city officials in April that any Mello-Roos Community Facilities District tax passed with less than a unanimous vote could be challenged in court by any landowner who voted against the tax.

The city reportedly relied upon a section of a state government code that allowed selective balloting if fewer than 12 registered voters lived for at least 90 days within the district where the tax was to be implemented. However, that section was found unconstitutional in a similar legal case in San Diego in 2014, HJTA notes.

“HJTA has taken no position for or against the City’s desire to build a streetcar line,” Coupal notes. “But…we want city officials to be aware of the potential legal and fiscal repercussions of its proposal.”

A streetcar’s long, bumpy road

As proposed, the Downtown/Riverfront Streetcar line will extend from the West Sacramento Civic Center to Sacramento’s Midtown entertainment and retail district. Supporters note that the project will offer new choices for residents, business owners and visitors in terms of shopping, dining, lodging, cultural and entertainment landmarks, employment centers and regional transportation services.

The route will connect major destinations between West Sacramento and Sacramento’s downtown and midtown districts. These include Raley Field, Riverwalk, Downtown Commons including the Golden 1 Center, hotels in Sacramento and West Sacramento, the California State Capitol, Sacramento Convention Center, West Sacramento City Hall/Community Center, Old Sacramento Historic District, the Sacramento Community Center Theater, Memorial Auditorium, the Sacramento Valley Station and the Railyards Specific Plan Area. Adjacent neighborhoods like Alkali Flat, Midtown, Broderick, Washington and Bridge districts will also benefit, according to the project’s website.

The streetcar line will offer Downtown and Midtown transportation services similar to those from Sacramento Regional Transit’s Light Rail system. The former, with 22 stops, is capable of transporting up to 160 passengers per car and departing every 15 to 20 minutes during a 16-hour service period each day. SacRT’s Light Rail runs for 20 hours daily, departing every 15 to 30 minutes from 12 stops in Sacramento only. Ridership capacity is up to 240 passengers per train.

It could generate about $1.3 billion in new property value growth and $2 billion in sales revenue for Sacramento over a 20-year period, according to Sacramento Mayor Darrell Steinberg.

“It’s a perfect opportunity,” U.S. Representative Doris Matsui recently told Fox40 News. “We have the [Golden 1 Center] arena in place, and we have all kinds of other development [taking place] there.”

The project is still in the design phase, but city officials expect to begin groundbreaking in June 2018 and finish three years later. About half of the Streetcar line will run in proximity to Light Rail routes, resulting in construction of two additional SacRT stops along five blocks of H Street, as well as conversion of the K Street Light Rail route into a Streetcar route.

According to Sacramento City Councilman Steve Hansen, it took the cities of Sacramento and West Sacramento, SacRT, Yolo Transportation District and the Sacramento Area Council of Governments more than a decade to finalize the Downtown/Riverfront Streetcar Project, with the No. 1 hurdle being financing. A variety of federal, state and local resources were implemented to meet the project’s $200 million price tag. Measure S helps cover the estimated $5.1 million in annual operations and maintenance costs.

Opponents such as Eye on Sacramento say that operational figure is $1 million to $3 million too low. There’s also a major discrepancy between what the City believes operational revenues will be – about $2.1 million annually – and what they are more likely to be, a mere $300,000.

The two sides differ on the benefits of the project to downtown and midtown businesses. Supporters say it will promote clean air, reduce traffic and parking congestion, and “be a catalyst for economic development.” Streetcars, they note, “will provide an inexpensive, safe, and fun way for residents, workers, and visitors to connect with destinations and one another within the heart of Sacramento.”

Opponents argue that it will “create a traffic nightmare” for two years during construction, and reduce public access to businesses once the line actually opens. Circulator streetcars, they say, are “an obsolete technology that do not belong in modern American cities. They do not promote mobility; they do not promote economic development; they do not protect the environment.”

It’s an argument that’s being played out in other locales nationwide. Seven other major cities and regions – Oklahoma City, Milwaukee, Fort Lauderdale, Tempe, Orange County, Calif., New York City, and Washington D.C. – expect to complete their streetcar projects between 2018 and 2024, according to commercial real estate site Biznow.

September 11, 2017 - 3:17pm