Detroit’s M-1 RAIL Ride to Completion Officially Begins


This September, business leaders, foundations, government officials and Detroit residents celebrated the groundbreaking for the M-1 RAIL Streetcar project. An unprecedented public-private partnership and model for regional collaboration, the M-1 RAIL Streetcar project is the first major transit project led and funded by private businesses and philanthropic organizations, in partnership with local, state and federal governments.

M-1 RAIL is the non-profit organization leading the design, construction and future operation of a 3.3-mile (6.6 miles round-trip) modern streetcar along Woodward Avenue between Larned Street and West Grand Boulevard in Detroit, Michigan. Construction is expected to be complete late 2016. Click here to see photos from the groundbreaking event.

It will generate between $235 million and $297 million in critically needed property tax revenue for Detroit and its schools (before any abatements) to support essential services – in addition to all of the new income tax revenue from residential and business growth.

The $140 million of construction costs are being financed by the following sources: foundation grants totaling $43 million; state & local government grants/programs totaling $24 million; corporate & other philanthropic pledges of $30-32 million; a TIGER grant from U.S. Department of Transportation for $12.2 million; and commitments totaling $30 million through the New Markets Tax Credits (NMTC) program.

It is the first time NMTCs have been used to finance a public transportation project. Four different Community Development Entities (CDEs) have committed to providing allocation to the development, totaling $30 million, in two different funding phases.
• Cap Fund New Markets, LLC of Lansing, Michigan; $8 million
• Invest Detroit of Detroit, Michigan; $18 million (Phase 1 & 2 combined)
• Local Initiatives Support Corporation (LISC) of New York, New York; $5 million
• National Community Fund, an affiliate of United Fund Advisors of Portland, Oregon; $8 million

M-1 RAIL is the express foundation of the strategy to develop 10,000 new housing units, 5 million sq. foot of office and retail space, and to attract 25,000 new residents to the Greater Downtown in the next ten years.

In total, M-1 RAIL is projected to catalyze $3.47 billion in new economic development over the next decade. Construction of the RAIL will create more than 700 jobs.

“Detroit’s M-1 RAIL epitomizes what NMTC investments should support, although this project is the first of its kind the Credits were used for,” President of Cap Fund New Markets, LLC, Mark McDaniel said. “We are excited to see this transit system further transform the City of Detroit, especially for City residents and those who need access to good jobs and public transportation most.”

The M-1 RAIL project will enhance access to jobs and economic opportunity for all Detroiters. By catalyzing and concentrating job growth in the city center and around transit, M-1 RAIL will enhance access to jobs and increase economic mobility, particularly for Detroit’s disadvantaged and transit dependent residents.

“We are extremely pleased to assist in the financing of this high-impact project through Invest Detroit’s New Markets Tax Credit (NMTC) Program,” said Mary Seaberg King, Senior Vice President, Invest Detroit. “With $10 million in NMTC allocation provided for the first phase of M-1, Invest Detroit also plans to participate in the second phase with an anticipated allocation of $8 million. We believe that this is the first time NMTC has been used for a project of this type and greatly appreciate the collaborative partnership efforts which helped to launch this light rail transit system and bring the project from vision to reality.”

Tahirih Ziegler, Executive Director of the Detroit LISC program observes that “LISC has invested over $180 million in Detroit, including more than $33 million in NMTC financing, and the M 1 rail project will expand the impact of these investments by literally helping to connect them. By mutually reinforcing the redevelopment efforts in Grand/Woodward, Midtown, and Downtown, the project will serve to transform the entire corridor.”

”The M-1 rail project is the first project that we have financed in Detroit and we are proud to be supporting such an important economic and community development project, “said Colin Rowan, Principal, United Fund Advisors. “We have seen light rail stimulate economic growth and play an integral role in spreading economic prosperity in our hometown of Portland, Oregon and we are anxious to see similar results in Detroit.”

It is estimated the costs to operate and maintain the modern streetcar system will be approximately $5.5-million each year. M-1 RAIL will operate the streetcar system for a period of 10 years after construction. After that, M-1 RAIL is planning to transfer its assets to whatever entity is deemed appropriate to run it at that point, such as the recently formed Regional Transit Authority.

The M-1 RAIL project lies at the heart of the strategy for Detroit’s economic transformation as it will connect the entire corridor, unleashing new investment and development around the rail line. Soon, passengers will be just a ride away from the region’s central business district, Wayne State University, three professional sports stadiums, the Detroit Institute of Arts, the Detroit Riverfront, and more.

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