Since Hurricane Katrina wiped out more than 70 percent of its ridership, the cash-poor RTA has been unable to borrow money. But last month, the rating agency Standard & Poor's, thanks to steps taken recently to stabilize RTA finances, raised the authority's bond rating to investment grade for the first time since the storm.
For more than a year, New Orleans transit planners have been exploring ways to expand the streetcar network by bringing service to the North Rampart Street and St. Claude Avenue corridor, Loyola Avenue and Convention Center Boulevard. But before the upgrade in the bond rating, the RTA wasn't in a position to bring much to the table.
Buoyed by its new-found borrowing power, the RTA is preparing to ask the federal government to allocate about $121 million, about 57 percent of the estimated price tag to build the three rail lines. The lion's share of the rest -- $73.5 million -- would come from the sale of bonds backed by sales-tax collections allocated to the RTA. The agency also proposes using $13 million from a reserve account and $5 million the RTA has recouped from the Ernest N. Morial Convention Center for a stalled expansion.
Even with the local investment, the streetcar proposal likely will be a tough sell. The RTA funding strategy counts on getting $95.6 million -- nearly half the project's projected cost -- from a component of the federal stimulus package known as the Transportation Investment Generating Economic Recovery, or TIGER, grant program. The $1.5 billion fund pays 100 percent of the construction costs of selected projects. Competition for the grants is expected to be fierce, as transit systems across the nation vie for light rail projects, new buses and improvements to roads and repair and administrative facilities.
The RTA also could be pitted against in-state rivals, including the state itself. The Department of Transportation and Development is considering applying for more than $200 million in TIGER dollars to fill the budget gap in big-ticket items such as construction of segments of Interstate 49. Under law, no more than $300 million of the $1.5 billion can be awarded to one state.
The deadline to apply for the TIGER program is Sept. 15. Anxious to launch brick-and-mortar projects that will create jobs, the White House has pledged to announce recipients of the money in January.
Under the RTA plan, about 12 percent of the money would come from $25 million in grants awarded by the Federal Transportation Administration. That agency in recent years has frowned on getting involved in projects unless at least half the cost is paid locally, a threshold the streetcar plan just misses. But RTA officials they believe the local money they are pledging will be sufficient to win over the FTA. If nothing else, RTA managers said the faith of one of the nation's major bond rating firms has put the agency in a much better position.
"It shows that they believe we've begun to put our fiscal house in order, " said Justin Augustine, the RTA's chief executive officer and a vice president at Veolia Transportation, the French conglomerate that runs New Orleans' transit system. "They like our vision."
Since Veolia took over daily management of the system last fall, the company has slashed costs, including payroll, and improved services. And while ridership is still only a fraction of the pre-storm level, the numbers have grown slowly but steadily.
All three streetcar lines being proposed would link to the Canal Street line. The St. Claude route, which would stretch from the French Quarter to Bywater, has been well-received by residents who live near and along the corridor. Dubbed the "French Quarter loop," the line would travel about four miles along North Rampart Street from Canal Street to Press Street and would feature a 1.2-mile spur on Elysian Fields Avenue that would connect with the Riverfront streetcar line at Esplanade Avenue. The cost estimate for the project is $115.2 million.
The Convention Center Boulevard line would travel Uptown from Canal Street via Tchoupitoulas and Poydras streets to Convention Center Boulevard, where it would travel Uptown before turning toward the river at Henderson Street and connecting with the Riverfront streetcar line behind the Convention Center. It would span 1.8 miles and cost about $51.3 million.
The 1.5-mile Union Passenger Terminal route would travel along Loyola Avenue between Canal Street and the Greyhound and Amtrak terminals. Under the RTA's plan, the $45.6-million line is the only one of the three that would be fully financed by the federal government.