Chatham Area Transit to propose tax district to help fund streetcar project
Chatham Area Transit needs to come up with $16 million to help secure a federal grant for its streetcar expansion project, and the agency's leader has identified a potential source.
CAT CEO Chadwick Reese will propose the creation of a tax allocation district for part of downtown and West Savannah during today's monthly CAT board meeting.
The West Downtown Tax Allocation District, or TAD, is projected to generate anywhere from $36.7 million to $84.5 million in revenue. CAT is proposing $16 million of those funds be earmarked for the streetcar project and another $750,000 for a ferry landing on West River Street.
CAT operates the Savannah River ferries that run between two terminals on River Street and another at the Savannah International Trade and Convention Center.
CAT representatives have had informal talks with city of Savannah officials, but Reese and city employees involved in the talks stressed the discussions were still in the preliminary stages. Reese's presentation to the CAT board should not be mistaken as a commitment to the TAD on the city's part.
"It could happen, but we're not there yet. Not even close," said Assistant City Manager Pete Shonka.
CAT's Reese sees the TAD revenue as a source for the local matching funds portion of the Transportation Investment Generating Economic Recovery, or TIGER, grant CAT applied for in June. The Federal Transit Authority is expected to decide on the application in September, and having a "dedicated source" of funding would improve CAT's chances of approval.
"Expanded streetcar service would help us move people in and out of major gathering spots, and it is an added attraction for tourists," Reese said. "And everywhere they've put a streetcar in, redevelopment has followed. Look at New Orleans, Tampa, Little Rock, Ark. ... it's a proven winner."
The West Downtown TAD would include the western edge of downtown north of Turner Street, with Barnard Street as the eastern boundary. The district would also run west of the viaduct and be bordered by West Bay to the north, Louisville Road to the south and Interstate 516 to the west.
Portions of the Fellwood, Augusta Avenue and Woodville neighborhoods would lie within the district.
TADs generate revenue from appreciation of property values within their boundaries. A TAD doesn't levy new taxes but instead uses property tax revenues from a base year to establish a baseline.
Any increased property tax revenues from future development would then be earmarked for infrastructure and other improvements within the TAD boundaries.
Significant redevelopment is already underway in the proposed West Downtown TAD. Two hotels are under construction and developers have received permission to build two more.
One of those, Richard Kessler's Grand Bohemian development in the former Plant Riverside power plant, is an estimate $100 million project.
Work is also underway on a brewery in the former Coastal-Sail building on Indian Street and a Family Dollar is in development at the corner of Fahm Street and Oglethorpe Avenue.
Other future redevelopment projects within the TAD boundaries include the CitiTrends warehouse, which is under contract for sale, the U.S. Postal Service office on Fahm Street and Yamacraw Village.
The development activity differentiates the westside TAD from the one created in 2007 to fund infrastructure improvements in or around the stalled Savannah River Landing project, Reese said. That East Downtown TAD has yet to generate revenue, leaving taxpayers to cover annual debt service payments on the bonds.
Property tax values are already improving within the West Downtown TAD boundaries, unlike on the eastside.
"The development is already taking place," Reese said. "You don't have to close your eyes and envision what could be like you had to at Savannah River Landing."
West Downtown TAD revenue could also fund improvements Kessler has lobbied the city for in relation to his Grand Bohemian project. The River Street riverwalk currently ends just east of his property line, and he voiced a desire to see the path extended in a meeting with Savannah City Council in March.
Kessler also mentioned streetscape improvements along the city right-of-way at Bay Street and Martin Luther King Boulevard, as well as the relocation of a pump station.
The ferry terminal CAT wants to build on West River Street would also tie into Kessler's property. The streetcar line already runs past the site, and with Kessler planning a parking garage open to the public as part of the Grand Bohemian, Reese sees the potential for an intermodal hub.
"You could park your car in the garage there and ride the ferry to one of the points along the river or hop on the streetcar to get around downtown," he said.
TAD revenues, combined with the $38 million to $42 million that could come from the TIGER grant, would allow CAT to extend the streetcar line throughout downtown Savannah. The line currently runs along River Street between MLK and Morrell Park, and the plan is build a loop utilizing Fahm Street to the west, Randolph Street to the east and Liberty Street to the south.
The system would tie together near CAT's main transfer station currently under construction on Oglethorpe Avenue in the former Greyhound bus terminal.
