Federal official: Cincinnati will forfeit $40M in grants if streetcar project is canceled

Mallory: Giving cash back 'a wasted opportunity'

CINCINNATI -- Federal officials have informed Cincinnati that the city will forfeit more than $40 million in grants if the streetcar project is canceled.

In a letter sent to Mayor Mark Mallory, the Federal Transit Administration (FTA) stated a $15.9 million grant and a $24.9 million grant “will not be available to the city of Cincinnati for other projects.”

The FTA’s letter appears to thwart plans by Mayor-elect John Cranley, who wants to cancel the streetcar and lobby the Obama administration to let the money be used for other transportation projects.

Mallory requested the letter last week and he received it Wednesday. The mayor released it publicly Thursday afternoon, just a few hours before streetcar supporters will hold a Town Hall-style meeting to rally support for the project.

“I wanted to get an official word from the FTA on what the consequences are of canceling this project, and they are severe," Mallory said.

Cincinnati’s three federal grants for the streetcar project are:

  • $24.9 million from the FTA’s New Starts/Small Starts program;
  • $15.9 million from the Transportation Investment Generating Economic Recovery (TIGER) program; and
  • $4 million from the Congestion Mitigation and Air Quality Improvement (CMAQ) program.

The letter, written by FTA Administrator Peter M. Rogoff, states only one of the three federal grants awarded to Cincinnati’s streetcar could be reallocated for another local project. But even that decision is up to Ohio Gov. John Kasich, Rogoff said.

“FTA is required by statute to return the unused TIGER funds to the U.S. Treasury,” Rogoff wrote.

“The FTA New Starts program can be used only for major transit capital investments that have met statutory requirements and are currently oversubscribed as a result of funding cuts imposed by Congress.”

Cranley and a new City Council majority, which take office Dec. 1, have indicated they are likely to scuttle the project within the next month.

Jay Kincaid, Cranley’s chief of staff, said the mayor-elect still plans on lobbying congressional lawmakers to see if the money can be earmarked for other local programs.

“We are not giving up yet on reprogramming these grants,” Kincaid said.

“We are going to work with the local congressional delegation, Sens. Sherrod Brown and Rob Portman, and the White House to reposition this money to benefit projects like the I-71/MLK interchange and the Western Hills Viaduct.”

Mallory, a strong streetcar supporter, was skeptical of Cranley’s efforts. Trying to cancel the project after years of planning could make it more difficult for the Queen City to get federal grants in the future.

“This is an agenda item of the President of the United States, and the President wants to see this advance,” Mallory said, referring to urban mass transit projects.

Referring to losing the grants, Mallory added, “Not only would it be a wasted opportunity, but it would cause a real problem with the relationship the federal government has with the city of Cincinnati. Turning our backs on this project would jeopardize more than just canceling the streetcar.”

Discussed since 2007, project construction began in August with crews relocating utilities and installing tracks. About $25 million has been spent on work so far.

Another $91 million has been encumbered via contracts.

When completed in 2016, the system will feature a 3.6-mile looped route with 18 stops.

Supporters think Cincinnati’s project will spark redevelopment of vacant or dilapidated parcels along its route, like similar projects have done in Portland, Ore., and Tacoma, Wash.

Opponents counter the project’s benefit is too uncertain and the estimated $3 million to $4 million in annual operating costs will strain the city’s budget.

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