U.S. Transportation Secretary Ray Lahood is coming to Detroit on Monday and the city's most prominent business leaders have their fingers crossed that he'll deliver the federal government's blessing on a long-awaited light rail project downtown.
The project, funded mostly by private donors including billionaires Dan Gilbert and Mike Ilitch, looked dead earlier this year when it became clear the city of Detroit was too broken to carry forward the more ambitious plan it envisioned. The Federal Transit Administration concluded the $500 million project wasn't feasible and Lahood reallocated a $25 million federal grant he had promised to a less-expensive bus rapid transit system instead.
But the M-1 Rail Consortium, a group of local business leaders, refused to give up on their vision for a more modest system of electric streetcars operating in the city's core. They asked the government for 90 days to prove their case and raise additional funds to not only build the 3.4-mile rail system but to operate it for the first 10 years too.
"We got them all in a room and said, 'You can't turn your back on this type of private investment'," said Rip Rapson, chief executive of The Kresge Foundation, one of the project's chief backers.
In April, the M-1 group submitted a 1,200-page report detailing their plan, including new contributions from General Motors, Chrysler Group and the Ford Foundation, among others.
"M-1 RAIL and its donors are making this commitment because of our deep pride in the City of Detroit and the region; our abiding optimism for its future; and our conviction that this project will be the catalyst to ignite the reinvestment and growth Detroit so desperately needs."
Originally projected at $100 million, the cost is now pegged at $137 million to include more leeway for cost overruns. Private donors have pledged about $85 million, including $3 million in "naming rights" for each of the 13 planned stations. The Kresge Foundation has pledged $35 million, the largest single donation.
Lahood would be foolish not to take advantage of the business community's commitment to complete the M-1 rail system. Most of what's going right these days in Detroit is because of business leaders like Gilbert, chairman of Quicken Loans; Ilitch, founder of Little Caesar's Pizza, and automotive titan Roger Penske. The city of Detroit, under a state consent decree as an alternative to bankruptcy or an emergency manager, certainly can't make things happen.
LaHood has said the government will consider awarding the light-rail project up to $25 million on top of $25 million allocated to the rapid bus system if he becomes convinced the smaller plan is feasible. But the group's long-term hope is to make the project eligible for larger federal transportation funding over the long-term.
There are still hurdles, however, the largest of which is the absence of a regional transportation authority to run the system. Business leaders say that will happen, eventually. What's clear is that business moves faster than government.
