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The Banks Cincy

News and Press

Cincinnati Streetcar Plan Pits Desire for Growth Against Fiscal Restraint

It has been a long time since a streetcar was just a streetcar here.
Mayor John Cranley opposed the $133 million streetcar project, but the City Council voted last week to resume it.

Instead, a $133 million project to build a 3.6-mile streetcar line through downtown has come to represent, depending on whom you talk to, a debt trap that will sink the city or an ambitious development effort that is central to Cincinnati’s revival.

And when the debate ended last week in an unexpected last-minute victory for the streetcar proponents, it was seen as both a vote of confidence in the city’s future and a reminder of how tenuous support for the project had become.

On the brink of being shut down, the project was saved by a successful petition drive and a written commitment, provided by the Haile U.S. Bank Foundation, from about 15 private backers to pay up to $9 million in operating costs, if needed, over the line’s first decade.

“I believe in Cincinnati with or without a streetcar,” said Mayor John Cranley, a Democrat who won election this year on a pledge to kill the project. He spoke at a news conference 10 hours before a deadline set by the federal government for a decision on the project. He added, obviously chagrined, “We’re going to have a streetcar.”

The city’s last streetcar was seen in 1951. The proposed new line, part of an effort by transit advocates dating to 2001, would run from The Banks, the newly revitalized region near the city’s ballparks, through the downtown business area and north to the Over-the-Rhine neighborhood, which is also undergoing a renovation. Advocates hope that the program will foster a more walkable urban core and that it eventually will be part of a larger system.

Critics say that the line poses unreasonable financial risks and that it will direct scarce resources to a project that will benefit only one part of an ailing city.

“The frustration is that the other 51 neighborhoods in the city are suffering,” said Christopher Smitherman, a City Council member and former local president of the N.A.A.C.P. “And these guys are talking about how they want a choo-choo train running through downtown.”

The backdrop is a city, Ohio’s third largest, that is grasping for progress. Downtown is crammed with Fortune 500 companies, including the national headquarters for the supermarket chain Kroger, Macy’s and Procter & Gamble. But the view to the north, away from the Ohio River, is of a rot of abandoned buildings.

The Cincinnati metropolitan area has a population of about 2.2 million, but the city itself has about 300,000 residents, about a 40 percent decline since its peak in 1950. The Children’s Defense Fund recently ranked Cincinnati second in the nation out of 76 major cities, behind Detroit, for child poverty, with 53 percent of children living in poverty.

But there are also signs of a turnaround. The Banks mixed-use project, with retail, residential and entertainment, has brought a radical transformation in 18 acres of riverfront between the baseball and football stadiums.

Over-the-Rhine, blighted in recent decades but full of historic Italianate architecture, has become one of the city’s biggest success stories. A patchwork of restaurants and shops have emerged that for some represent a new era for Cincinnati.

Derek Dos Anjos moved here from Brooklyn with his wife, Jocelyn, and sank their life savings into the Anchor, a restaurant along the streetcar’s planned route in Over-the-Rhine. “There aren’t many chances to be a pioneer,” Mr. Dos Anjos said. “This is a chance to be part of moving a city in the right direction.”

But since its proposal, doubts have grown about the project, even after the city had sunk $34 million into it and a third of the route was already laid. On Dec. 4, just days after Mr. Cranley was sworn in, the newly elected City Council voted 5 to 4 to suspend work and bring in the independent auditors KPMG to analyze the cost of completion versus the cost of cancellation. The pause alone cost the city $1.7 million to $2.8 million, according to KPMG.

“I personally don’t have strong passion about the streetcar one way or another,” Mr. Cranley said in an interview. “But I’ve got an $800 million pension liability.” In July, because of that liability, Moody’s downgraded Cincinnati’s bond rating. Mr. Cranley also raised concerns about an estimated $20 million budget deficit, even as the city’s police and fire departments are understaffed.

But the Council vote set off a maelstrom of grass-roots activity, organized under the moniker Believe in Cincinnati, to save the streetcar.

Mr. Cranley offered a lifeline to streetcar supporters, if a slippery one: raise an estimated $80 million to take streetcar operations and maintenance off the city’s books for 30 years and he could support it. That was less than a week before a deadline set by the Federal Transit Administration, which said it needed an assurance that the city was moving ahead, or else it would withdraw $44.9 million in funding needed to complete the project.

However, another set of numbers proved more motivating. KPMG’s audit showed that completing the line would cost the city $68.9 million; canceling would run between $16.3 million and $46.1 million, not including the potential costs of litigation, which could be astronomical.

The city could spend millions of dollars and have a streetcar with the potential for return on investment, or have nothing to show for it while facing a tangle of lawsuits, proponents argued.
“There were a lot of people who realized, once the audit came back, that the numbers were just unacceptable,” said Eric Avner, vice president of the Haile foundation. “Cincinnati did not have the luxury of wasting that much money.”

Ninety minutes before the scheduled vote, the foundation secured $9 million from 15 unnamed local business and philanthropic leaders who agreed to cover any funding gaps in streetcar operations over 10 years.

The written promise fell short of Mr. Cranley’s number, but was enough to produce a veto-proof 6-to-3 Council vote on Thursday to resume construction.

Yvette Simpson, a council member who voted for the project, summed up her support: “It’s not just about a streetcar. It’s that Cincinnati can accomplish great things.”