All aboard
The Portland City Council will now get to keep a closer eye on the Portland Development Commission, but meanwhile, who's watching Tri-Met? It seems that Bernie & Co. are getting into the real estate business these days. And whaddya know, SERA and Walsh Construction get a piece. Fascinating.
I'm glad to see the affordable housing going up, and a probably sketchy motel coming down. But does it have to go through Tri-Met, which is fast becoming the least supervised pork pot around? Sheesh. Why is our transit agency in the real estate business at all?
The whole bit about how this giveaway of light rail money is going to be made up at the farebox is cute. Let's see, they blew $907,000 on this a couple of years back. With 5 percent interest over two years, that's almost a million. They are going to get $300,000 from Reach for the property. That's almost a $700,000 difference. According to the story in the O, "TriMet estimates 30 years of transit fares generated by the project to be worth $602,000." Even if that's a present-value figure, and even if the ridership estimates aren't inflated, it doesn't add up. As I say, this may be a great project, but that sales pitch has an odor to it.
| Posted at 11:15 AM | Permalink |
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Comments (12)
Considering how little a percentage of the actual fare collection in the fair box actually oes to cover the cost of a ride, and how great the general Tri Met payroll tax revenue subsidy to Tri Met for each ride is, I am reminded of the fellow running the Almagamated Widget Company, who says: "I lose eleven cents on each item I sell, but I make it up on volume."
Generating "X" new rides per ear, each requiring a subsidy in excess of $ 2.50 per ride from Tri Met general payroll tax revenues helps pay for he property give away how.....?
Posted by Nonny Mouse | May 24, 2007 12:10 PM
"This is really a positive," said Fred Hansen, TriMet general manager.
Priceless!
Posted by rr | May 24, 2007 1:12 PM
Affordable housing = a 700sf condo that costs $300K.
Posted by jim | May 24, 2007 1:18 PM
"Affordable housing = a 700sf condo that costs $300K" affordable for the schnook that makes a paltry $100K per year. Oh oh, I guess that makes the councilmen in line for a pay increase so they can afford affordable housing. Damn, it will take a quart of rat-gut to make sense out of that, Hell, why not a raise in taxes for the poor councilmen's raise?
Posted by KISS | May 24, 2007 1:40 PM
Affordable housing = a 700sf condo that costs $300K.
I hope and pray that's not what they have in mind for Interstate.
Posted by Jack Bog | May 24, 2007 1:43 PM
Few lenders or sellers would use a two year old appraisel to determine today's property price. This is beyond smelling. Sure, property values haven't gone up in the last two years-not. If Trimet is so sure of that why not do another appraisel.
The $600,000T of fare increases due to the project is an interesting bit of math. How can Trimet figure that all the fare box receipts generated by the project is accredited to the project when there are numerous other expenses in providing transit service. I hope someone reviews their math.
Posted by Jerry | May 24, 2007 2:00 PM
They're probably arguing (rightly or wrongly) that many of the people who live in these apartments will take MAX, and since the MAX trains are running through there anyway, any increased farebox revenue is without cost.
But even if that's true, to generate a present value of $600,000, at a 5 percent discount rate, you'd need to generate $39,000 a year, starting immediately. At $2 a ride, that's 19,500 rides. If a commuter rides 400 times a year, that's 49 dedicated, fare-paying Tri-Met customers needed to get to $600,000. Will there be that many in those apartments?
Of course, you really need $700,000 to break even here. Around $45,500 a year -- about 22,750 rides -- and to do that, at 400 rides annually, you'd need 57 dedicated customers out of those apartments.
And of course, they won't start riding for another year or two, and so now we're talking maybe 65 dedicated riders needed at $2 a ride. Seems a bit optimistic.
Posted by Jack Bog | May 24, 2007 2:15 PM
It could break even with 49 dedicated riders...if you don't count the line's share of light rail construction costs or annual maintenance for that part of the line, or the share of tri-met's public relations budget, or lobbying budget or staff salaries, etc, etc, etc.
Posted by John Fairplay | May 24, 2007 5:02 PM
Jack, your math is very conservative. But even accepting 65 very dedicated riders out of 50 units is beyond reality. It is Trimet "spin" that is about as bad as Matt Brown's PDOT "spin" that SoWhat will have 40% mass transit ridership. We keep having this "spin cycle" by all of our government agencies-trying!
Posted by Jerry | May 24, 2007 11:43 PM
This will never "generate" the transit ridership numbers they claim. Just like all other Transit Oriented Developments do not. So if Freddy baby used the real ridership generated it's probably 60 years worth of fares.
But this is how light rail "spurs development" along the line. By triggering heavily subsidized projects.
I'm pretty sure Sam Adams thinks this is good transportation planning.
TriMet's Fred Hanson, PDC's Bruce Warner, Port of Portland's Bill Wyatt.
Hmmm?
All Goldschmidt cronnies.
I mean Portland elite.
Among past and other current whoppers,
Hansen says this project is a positive and IKEA was attracted by airport MAX, Warner said SoWa is going as planned and we need the CC hotel and Bill Wyatt says a new $70 million Port headquarters will save money.
Imagine the laughs these guys must have over coctails.
And they get cozied up to by every
Posted by Wendy | May 24, 2007 11:53 PM
Now we know why they announced another fare increase last week...
Go ahead, Trimet. Keep raising it. Eventually it will cost as much for a bus pass as parking in a garage downtown, and I will be back in my car to get to work.
Posted by Jon | May 25, 2007 9:00 AM
^if you haven't noticed, downtown parking rates have been going up too. The garage across the street was $7.75 for the early bird special a year ago. It's all the way up to $9.50 now. I've seen a few other garages around town charging over $10 a day! I thought the oil business was profitable...
Posted by MarkDaMan | May 25, 2007 9:20 AM