The City Council unanimously voted today to approve a financing tool that will allow the city to use tax revenues generated from parcels along the Nicollet-Central corridor to help finance a proposed streetcar line.
For the first phase of the project, city officials are promoting a 3.2-mile streetcar line from Lake Street to University Avenue estimated to cost around $200 million. Eventually, the goal is build a line stretching from 46th and Nicollet to Columbia Heights.
The financing plan approved by the Council today establishes a Value Capture District that allows the city to tap taxes generated from five parcels along the line to help pay for the project. City officials estimate the parcels could generate $6 million in tax revenues, allowing the city to issue $60 million in bonds for the streetcar line.
The Council also approved an amendment to the financing plan offered by Council President Barb Johnson and City Council Member Lisa Goodman that does not “commit the city to use 100 percent of the captured value to be used for a streetcar.” The amendment was designed to discourage developers from applying for tax-increment financing (TIF) for projects along the streetcar line.
Council members predicted the streetcar line would fuel additional development along the line, including high-density housing that would increase the city’s population and tax base.
City Council Member Meg Tuthill (10th Ward) said she was “getting on the love train” when she spoke in favor of the streetcar funding plan.
Kevin Reich, who represents the Council’s 1st Ward, said streetcars are unparalleled among transit options for driving development. He predicted the line would increase tourism in the city and help local merchants see more foot traffic.
In August, Council members are expected to review more details on the proposed streetcar line, including an update on cost projections.