South Central Light Rail Extension Phoenix, Arizona New Starts … · 2020. 8. 27. · Project Development History, Status and Next Steps: The City of Phoenix selected the locally

South Central Light Rail Extension Phoenix, Arizona

New Starts Project Development (Rating Assigned November 2017)

Summary Description

Proposed Project: Light Rail Transit 4.8 Miles, 7 Stations

Total Capital Cost ($YOE): $704.54 Million (Includes $14.9 million in finance charges) Section 5309 New Starts Share ($YOE): $345.22 Million (49.0%)

Annual Operating Cost (opening year 2023): $17.75 Million

Current Year Ridership Forecast (2017): 8,700 Daily Linked Trips 2,861,400 Annual Linked Trips

Horizon Year Ridership Forecast (2037): 13,500 Daily Linked Trips 4,461,300 Annual Linked Trips

Overall Project Rating: Medium-High Project Justification Rating: Medium

Local Financial Commitment Rating: Medium-High Project Description: Valley Metro plans to extend its light rail system from downtown Phoenix to the South Mountain Village Core via Central Avenue and 1st Avenue. The project includes track improvements along McKinley Street in downtown Phoenix, expansion of the existing Operations and Maintenance Center, purchase of 18 light rail vehicles, and construction of two park and ride lots with a total of 376 parking spaces. The service is planned to operate every 12 minutes for most of the weekday, every 20 minutes during late night and early morning hours, and every 15 to 20 minutes on the weekends. Project Purpose: The project provides a seamless connection between the South Mountain Village Core and Downtown Phoenix. It is intended to improve mobility and satisfy existing and projected travel demand in this highly transit-dependent corridor. Roughly 40 percent of the population in the corridor lives below the poverty level and 13 percent of the households own no cars. The project connects the corridor to regional activities including the Arizona State University (downtown and main campuses), downtown Phoenix, and the Phoenix Sky Harbor International Airport. The extension will also support existing and planned economic and transit-oriented development opportunities throughout the South Central Avenue corridor. Project Development History, Status and Next Steps: In November 2013, Valley Metro completed an alternatives analysis and with the City of Phoenix selected light rail as the locally preferred alternative (LPA). In June 2015, the LPA was included in the region’s fiscally-constrained long range transportation plan. The project entered New Starts Project Development in November 2015. An Environmental Assessment was published in November 2016 and the project completed the environmental review process with a Finding of No Significant Impact from FTA in January 2017. Valley Metro anticipates entering into Engineering in 2018, receipt of a Full Funding Grant Agreement in 2019, and the start of revenue service in 2023.

Significant Changes Since Last Evaluation (November 2016): No significant changes.

NOTE: The financial plan reflected in this table has been developed by the project sponsor and does not reflect a commitment by DOT or FTA. The sum of the figures may differ from the total as listed due to rounding.

Locally Proposed Financial Plan Source of Funds Total Funds ($million) Percent of Total

Federal: Section 5309 New Starts

$345.22

49.0%

Local: City of Phoenix Proposition 104 Sales Tax Maricopa County Proposition 400 Excise Tax

$195.30

$164.02

27.7%

23.3%

Total: $704.54 100.0%

AZ, Phoenix, South Central Light Rail Extension (Rating Assigned November 2017)

Factor Rating Comments Local Financial Commitment Rating

Medium-High

Non-Section 5309 New Starts Share

+1 The New Starts share of the Project is 49.0 percent.

Project Financial Plan Medium Current Capital and Operating Condition (25% of local financial commitment rating)

Medium • The average age of the bus fleet is 7.5 years, which is in-line with the industry average. • The most recent bond ratings for Valley Metro, issued in April 2016, are as follows: Fitch AA

and Standard & Poor’s Corporation AA+. • Valley Metro Rail’s current ratio of assets to liabilities as reported in its most recent audited

financial statement is 0.5 (FY 2016). • There have been no service cutbacks or cash flow shortfalls in recent years.

Commitment of Capital and Operating Funds (25% of local financial commitment rating)

Medium-High • Approximately 50.3 percent of the non-Section 5309 New Starts funds are committed or budgeted, and the rest are considered planned. Sources of funds include Maricopa County Proposition 400 Public Transportation Fund (PTF) excise tax revenues and bond proceeds, and City of Phoenix Proposition 104 sales tax revenues and bond proceeds.

• Approximately 77.2 percent of the funds needed to operate and maintain the transit system in the first full year of operation are committed or budgeted, and the rest are considered planned. Sources of funds include Federal formula funds used for preventive maintenance, farebox revenue, contributions from the cities of Phoenix, Tempe, Mesa, Glendale, and Chandler, and Maricopa County Proposition 400 PTF excise tax revenues and bond proceeds.

Reasonableness of Capital and Operating Cost Estimates and Planning Assumptions/Capital Funding Capacity (50% of local financial commitment rating)

Medium-Low • Growth in capital revenue assumptions is optimistic compared to recent historical experience. • The capital cost estimate is optimistic. • Regarding growth in operating revenue assumptions, farebox collections are optimistic and

contributions from member cities are conservative compared to recent historical experience. • Operating cost estimates are reasonable compared to recent historical experience. • No funding is currently available to cover unexpected Project cost increases or funding

shortfalls. Valley Metro has access to funds via additional debt capacity, cash reserves, or other committed funds to cover 21 percent of annual system wide operating expenses.

South Central Light Rail Extension Phoenix, Arizona


LAND USE RATING: Medium

The land use rating reflects population density within one-half mile of proposed stations, employment served by the line, and the share of legally binding affordability restricted (LBAR) housing in the station areas compared to the share in the surrounding county.

• The station areas have an average population density of 4,634 per square mile, which rates Medium-Low by FTA benchmarks. The project would serve a total of 104,857 employees, which rates Medium. The average daily parking cost in the Phoenix central business district (CBD) is $13, which corresponds to a Medium-High rating. The ratio of station area to county LBAR housing is 8.79, corresponding to a High rating.

• Development in the Central Avenue corridor is of varying character, with the downtown and Central City area being more transit-supportive, while development south of the Interstate 17 is less dense. The project mostly serves an auto-oriented area south of the Phoenix CBD.

• The arterial roads along South Central Avenue create a well connected street grid. The corridor contains continuous sidewalks. There are crosswalks at most signalized intersections, but many of the non-signalized intersections do not have crosswalks.

ECONOMIC DEVELOPMENT RATING: Medium Transit-Supportive Plans and Policies: Medium

• Growth Management: Arizona requires municipalities to identify targeted growth areas tied to infrastructure improvements as part of their comprehensive plans and requires them to have policies and implementation strategies for promoting a regional system of open space. Phoenix is engaged in an ongoing planning effort to concentrate growth in identified cores and corridors, including the project corridor.

• Transit-Supportive Corridor Policies: Phoenix has adopted transit-oriented development (TOD) policies and typologies for each of the existing light rail stations, and plans are currently being completed. The City recently proposed typologies for each of the proposed stations, which range from high density downtown to mid and lower density place types at the southern end of the corridor.

• Supportive Zoning Regulations Near Transit Stations: Density and land use character controls are varied in the corridor. Zoning in the northernmost station areas adjacent to downtown allows high densities and supports transit-friendly development. The remainder of the corridor is zoned general commercial and residential which allows low to high density residential development and medium density commercial development. Current zoning in most of the corridor is not transit supportive but the City intends to amend the zoning code as this project is developed.

• Tools to Implement Land Use Policies: Phoenix gives developers points toward density bonuses for including sustainability elements. The City’s Adaptive Reuse Program streamlines development for the adaptation of old buildings, many of which are targeted in the corridor. To date, the City has programmed a few capital improvements to make the corridor more pedestrian and bicycle friendly. The City has been conducting a fair amount of outreach to property owners along the corridor.

Performance and Impacts of Policies: Medium-High • Performance of Land Use Policies: 302 projects, valued at $10.1 billion, have been completed or are

under construction along the region’s existing LRT line. The developments contain a total of over 22,000 residential units and over 16 million square feet of commercial/office space. This development is high-density in the downtown areas and medium-high density in the station areas outside of downtown. The developments typically have transit-friendly characteristics.

• Potential Impact of Transit Investment on Regional Land Use: The corridor has not been intensely developed and has many opportunity sites for redevelopment. There are 277 acres of vacant land within one half mile of the proposed alignment plus many existing surface parking lots. Phoenix is one of the fastest growing metropolitan areas in the United States with a robust real estate market,

which indicates that significant transit-oriented development is possible. However, the corridor has been lagging the region in development.

Tools to Maintain or Increase Share of Affordable Housing: Medium-Low • Phoenix’s general plan includes goals and objectives to increase the supply of affordable housing

near existing and proposed light rail stations. The City provides density bonuses for affordable housing and increased development entitlements for projects that provide long-term affordable units. The City has carried out two recent public housing rehabilitation projects in the corridor.

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0 10.5Miles º

SOUTH CENTRAL LIGHT RAIL EXTENSIONPhoenix, Arizona

Lincoln St/1st Ave/Central Ave

Buckeye Rd/Central Ave

Audubon Center/Central Ave

Broadway Rd/Central Ave

Roeser St/Central Ave

Southern Ave/Central Ave

Baseline Rd/Central Ave Baseline Rd

Southern Ave

Broadway Rd

University Dr

Van Buren St

7th Av

e

Centr

al Ave

7th St

16th

StRoosevelt St

!( South Central Stations!( Existing Light Rail Stations

South Central Light Rail ExtensionExisting Valley Metro Light Rail

Operations and Maintenance Center ExpansionPark-and-Ride

Operations and Maintenance Center

Expansion

Dobbins Rd

McDowell Rd

Thomas Rd

24th

St

32nd

St

40th

St

7th Av

e

7th St

48th

St

24th

St

32nd

St

40th

St

PHOENIX

TEMPE

South Central Light Rail Extension/Downtown HubPhoenix, Arizona

New Starts Engineering(Rating Assigned November 2019)

Summary Description Proposed Project: Light Rail Transit

5.5 Miles, 9 Stations Total Capital Cost ($YOE): $1,345.17 Million (Includes $84.5 million in finance charges)

Section 5309 CIG Share ($YOE): $529.86 Million (39.4%) Annual Operating Cost (opening year 2023): $22.21 Million




Local Financial Commitment Rating: Medium-High

Project Description: Valley Metro plans to extend its light rail system from downtown Phoenix to the South Mountain Village Core via Central Avenue and 1st Avenue. The project includes track improvements along McKinley Street, 5th Street and 3rd Avenue in downtown Phoenix, expansion of the existing Operations and Maintenance Center, purchase of 17 light rail vehicles, and construction of two park and ride lots with a total of 376 parking spaces. The service is planned to operate every 12 minutes for most of the weekday, every 20 minutes during late night and early morning hours, and every 15 to 20 minutes on the weekends.

Project Purpose: The project provides a seamless connection between the South Mountain Village Core and Downtown Phoenix. It is intended to improve mobility and satisfy existing and projected travel demand in this highly transit-dependent corridor. Approximately 38 percent of the population in the corridor lives below the poverty level and 27 percent of the households own no cars. The project connects the corridor to regional activity centers including the Arizona State University (downtown and main campuses), downtown Phoenix, and the Phoenix Sky Harbor International Airport. The extension is expected to also support existing and planned economic and transit-oriented development opportunities throughout the South Central Avenue corridor.

Project Development History, Status and Next Steps: In November 2013, Valley Metro completed an alternatives analysis and with the City of Phoenix selected light rail as the locally preferred alternative (LPA). In June 2015, the LPA was included in the region’s fiscally-constrained long range transportation plan. The project entered New Starts Project Development in November 2015. An Environmental Assessment was published in November 2016, and the project received a Finding of No Significant Impact from FTA in January 2017. In October 2018, FTA determined that adjustments to the project scope would not cause significant environmental impacts that were not previously evaluated. In April 2019, FTA approved the project into New Starts Engineering. Valley Metro anticipates receipt of a Full Funding Grant Agreement in late 2020, and the start of revenue service in late 2023.

Significant Changes Since Last Evaluation (November 2018): The amount of CIG funding requested decreased from $665.86 million to $529.86 million, and the CIG share decreased from 49.5 percent to 39.4 percent.



FHWA Flexible Funds (Congestion Mitigation and Air Quality Program)

$529.86

$108.00

39.4%

8.0%

Local: City of Phoenix Proposition 104 Sales

Tax Revenues and Bond Proceeds

Maricopa County Proposition 400 Public Transportation Fund Excise Tax Revenues

$427.31

$280.00

31.8%

20.8%

Total: $1,345.17 100.0%


AZ, Phoenix, South Central Light Rail Extension/Downtown Hub (Rating Assigned November 2019)

Factor Rating Comments Local Financial Commitment Rating Medium-

High Non-Section 5309 CIG Share +1 level • The CIG share of the project is 39.4 percent.

Project Financial Plan Medium Current Capital and Operating Condition (25% of local financial commitment rating)

Medium • The average age of Valley Metro’s bus fleet is 6.81 years • The most recent bond rating for Valley Metro, issued in May 2019, are as follows:

Fitch Ratings, Inc. AA and S&P Global Ratings AA+. • Valley Metro’s current ratio of assets to liabilities as reported in its most recent

audited financial statement is 1.1 (FY2018). • There have been no service cutbacks or cash flow shortfalls in recent years.


High • All of the non-Section 5309 CIG capital funds are committed or budgeted. Sources of funds include, FHWA Congestion Mitigation and Air Quality Improvement Program (CMAQ) funds, Maricopa County Proposition 400 Public Transportation Fund (PTF) excise tax revenues, and City of Phoenix Proposition 104 sales tax revenues and bond proceeds.

• Approximately 78.5 percent of the operating funds needed to operate and maintain the transit system in the first full year of operation are committed or budgeted, and the rest are considered planned. Sources of funds include FTA Section 5307 Urbanized Area Formula funds, Section 5310 Enhanced Mobility of Seniors & Individuals with Disabilities funds, farebox revenue, contributions from the cities of Phoenix, Tempe, Mesa, Glendale, and Chandler, and Maricopa County Proposition 400 PTF excise tax revenues.


Medium-Low

• Assumed growth in capital revenue assumptions is optimistic compared to recent historical experience.

• The capital cost estimate is reasonable. • Regarding growth in operating revenue assumptions, farebox collections are

optimistic and contributions from member cities are conservative compared to recent historical experience.

• Operating cost estimates are reasonable compared to recent historical experience.

• Valley Metro has access to funds via additional debt capacity, cash reserves, and other committed funds to cover unexpected cost increases or funding shortfalls equal to at least 4.7 percent of the total CIG capital cost and 27.6 percent of annual system wide operating expenses.

South Central Light Rail Extension/Downtown Hub Phoenix, Arizona


LAND USE RATING: Medium


• The station areas have an average population density of 4,800 persons per square mile, which rates Medium-Low by FTA benchmarks. The project would serve a total of 134,600 employees, which rates Medium. The average daily parking cost in the Phoenix central business district (CBD) is $17, which corresponds to a High rating. The ratio of station area to county LBAR housing is 8.78, corresponding to a High rating.

• Development in the Central Avenue corridor is of varying character, with the northern few station areas in and near Downtown being more transit-supportive, while development south of Interstate 17 is less dense. The project mostly serves an automobile-oriented area south of the Phoenix Central Business District.

• The arterial roads along South Central Avenue create a well-connected street grid. The corridor contains continuous sidewalks. There are crosswalks at most signalized intersections, but many of the non-signalized intersections do not have crosswalks.

ECONOMIC DEVELOPMENT RATING: Medium

Transit-Supportive Plans and Policies: Medium • Growth Management: Arizona requires municipalities to identify targeted growth areas tied to

infrastructure improvements as part of their comprehensive plans and requires them to have policies and implementation strategies for promoting a regional system of open space. Phoenix is engaged in an ongoing planning effort to concentrate growth in identified cores and corridors, including the project corridor.

• Transit-Supportive Corridor Policies: Phoenix has adopted transit-oriented development (TOD) policies and typologies for each of the proposed stations in the project corridor. These range from high-density place types downtown to mid- and lower-density place types at the southern end of the corridor.

• Supportive Zoning Regulations Near Transit Stations: Density and land use character controls are varied in the corridor. Zoning in the northernmost station areas including and adjacent to downtown allows high densities and supports transit-friendly development. The remainder of the corridor is zoned general commercial and residential which allows low to high density residential development and medium density commercial development. Current zoning in most of the corridor is not transit supportive but the City intends to amend the zoning code as this project is developed.

• Tools to Implement Land Use Policies: Phoenix gives developers points toward density bonuses for features such as sustainability elements. The City’s Adaptive Reuse Program streamlines development for the adaptation of old buildings, many of which are in the corridor. To date, the City has programmed a few capital improvements to make the corridor more pedestrian and bicycle friendly. The City has been conducting a fair amount of outreach to property owners along the corridor.

Performance and Impacts of Policies: Medium-High • Performance of Land Use Policies: 344 projects, valued at $11 billion, have been completed or are

under construction along the region’s existing LRT line. The developments contain a total of over 25,000 residential units and over 18 million square feet of commercial/office space. This development is high-density in the downtown areas and medium- to high-density in the station areas outside of downtown. The developments typically have transit-friendly characteristics.

• Potential Impact of Transit Investment on Regional Land Use: The corridor has not been intensely developed and has many opportunity sites for redevelopment. There are 277 acres of vacant land within one half mile of the proposed alignment plus many existing surface parking lots. Phoenix is

one of the fastest growing metropolitan areas in the United States with a robust real estate market, which indicates that significant transit-oriented development is possible. However, the corridor has been lagging behind the region in development.


near existing and proposed light rail stations. The City provides density bonuses for affordable housing and increased development entitlements for projects that provide long-term affordable units. The City has carried out two recent public housing rehabilitation projects in the corridor.

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7thSt

7thSt

Jeffer

son/3r

d Ave

Centr

alAve

7thAv

e

Thomas Rd

McDowell Rd

Roosevelt St

24th

St

32nd

St

40th

St

Downtown Hub Van Buren St

Lincoln St/1st Ave/Central Ave

Buckeye Rd/Central Ave Operations andMaintenance Center

ExpansionPHOENIX University Dr

Audubon Center/Central Ave TEMPE

Broadway Rd/Central Ave Broadway Rd

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Roeser St/Central Ave 40th

St

Southern AveSouthern Ave/Central Ave

7thAv

e

16th

St

24th

St

Baseline Rd/Central Ave

Dobbins Rd

32nd

St

Baseline Rd

48th

St

SOUTH CENTRAL LIGHT RAIL EXTENSION/DOWNTOWN HUBPhoenix, Arizona

Park-and-Ride ! Existing Light Rail Stations (! South Central Stations ( Operations and Maintenance Center Expansion

South Central Extension 0 0.5 1 MilesExisting Valley Metro Light Rail º

Northwest Extension Phase II Phoenix, Arizona


Summary Description


Total Capital Cost ($YOE): $318.66 Million (Includes $15.2 million in finance charges) Section 5309 New Starts Share ($YOE): $156.14 Million (49.0%)

Annual Operating Cost (opening year 2023): $2.99 Million



Overall Project Rating: Medium-Low Project Justification Rating: Medium

Local Financial Commitment Rating: Medium-Low Project Description: Valley Metro plans to extend its light rail system from its end of line station in Northwest Phoenix to the Metrocenter Mall. The project includes the purchase of three light rail vehicles, the relocation of the existing Metrocenter transit center, and the construction of two park and ride lots with a total of 410 parking spaces. The service is planned to operate every 12 minutes for most of the weekday, every 20 minutes during late night and early morning hours, and every 15 to 20 minutes on the weekends. Project Purpose: The project will improve connectivity across Interstate 17, provide easy access to the region’s light rail system for various communities in north and west Phoenix, Glendale, and Peoria, and support transit-oriented land-use planning in the corridor, including the planned redevelopment of the Metrocenter Mall site. The project is intended to link Metrocenter to existing regional activity centers and major activity nodes such as the North Central Avenue office corridor, Phoenix Sky Harbor International Airport, Arizona State University, and downtown Phoenix. The project improves transit service in a corridor where 25 percent of the population lives below the poverty level and 10 percent of the households own no cars. Project Development History, Status and Next Steps: The City of Phoenix selected the locally preferred alternative (LPA) in November 2014, which was adopted into the fiscally constrained long range transportation plan in June 2015. The project entered New Starts Project Development in June 2017. Valley Metro anticipates completing the environmental review process with receipt of a Finding of No Significant Impact in summer 2018, entry into Engineering in early 2019, receipt of a Full Funding Grant Agreement in late 2019, and the start revenue service in late 2023.




$156.14

49.0%

Local: City of Phoenix Proposition 104 Sales Tax Maricopa County Proposition 400 Excise Tax

$132.52

$30.00

41.6%

9.4%

Total: $318.66 100.0%

AZ, Phoenix, Northwest Extension Phase II (Rating Assigned November 2017)

Factor Rating Comments Local Financial Commitment Rating Medium-Low

Non-Section 5309 New Starts Share N/A The New Starts share of the project is 49.0 percent.

Project Financial Plan Medium-Low

Current Capital and Operating Condition (25% of local financial commitment rating)

Medium • The average age of the bus fleet is 7.5 years, which is in-line with the industry average.

• The most recent bond ratings for Valley Metro, issued in April 2016, are as follows: Fitch AA and Standard & Poor’s Corporation AA+.

• Valley Metro Rail’s current ratio of assets to liabilities as reported in its most recent audited financial statement is 0.5 (FY 2016).

• There have been no service cutbacks or cash flow shortfalls in recent years. Commitment of Capital and Operating Funds (25% of local financial commitment rating)

Medium-Low • Approximately 18.9 percent of the non-Section 5309 New Starts funds are committed or budgeted, and the rest are considered planned. Sources of funds include Maricopa County Proposition 400 Public Transportation Fund (PTF) excise tax revenues and bond proceeds, and City of Phoenix Proposition 104 sales tax revenues and bond proceeds.

• Approximately 77.2 percent of funds needed to operate and maintain the transit system in the first full year of operation are committed or budgeted, and the rest are considered planned. Sources of funds include Federal formula funds used for preventive maintenance, farebox revenue, contributions from the cities of Phoenix, Tempe, Mesa, Glendale, and Chandler, and Maricopa County Proposition 400 PTF excise tax revenues and bond proceeds.


Medium-Low • Growth in capital revenue assumptions is optimistic compared to recent historical experience.



• Operating cost estimates are reasonable compared to recent historical experience.

• No funding is currently available to cover unexpected Project cost increases or funding shortfalls. Valley Metro has access to funds via additional debt capacity, cash reserves, or other committed funds to cover 21 percent of annual system-wide operating expenses.



LAND USE RATING: Medium-Low


• The station areas have an average population density of 5,511 per square mile, which rates Medium-Low by FTA benchmarks. The project would serve a total of 116,000 employees, which rates Medium by FTA benchmarks. The average daily parking cost in the Phoenix central business district (CBD) is $13, which corresponds to a Medium-High rating. The ratio of station area to county LBAR housing is 0, corresponding to a Low rating.

• Development in the project corridor is mostly low density commercial and industrial with surface parking fronting most buildings. The end of the corridor is an aging suburban mall surrounded by a large surface parking lot.

• The main roads in the corridor typically have sidewalks but they lack shade and are not comfortably separated from the roadway. Some of the industrial areas have no pedestrian facilities.

ECONOMIC DEVELOPMENT RATING: Medium Transit-Supportive Plans and Policies: Medium

• Growth Management: Arizona requires municipalities to identify targeted growth areas tied to infrastructure improvements as part of their local comprehensive plans and requires them to have policies and implementation strategies for promoting a regional system of open space. Phoenix is engaged in an ongoing planning effort to concentrate growth in identified cores and corridors.

• Transit-Supportive Corridor Policies: Phoenix’s General Plan and North Mountain Area Plan both recommend implementing policies and ordinances to support infill development with a scale and character supportive of transit near light rail lines. The City recently passed a Complete Streets ordinance and is emphasizing improving the pedestrian environment. Among the three stations in the corridor, Metrocenter is the only area where conceptual planning for transit-oriented development (TOD) has already occurred.

• Supportive Zoning Regulations Near Transit Stations: The two eastern-most station areas in the corridor have not been rezoned for TOD and are primarily zoned for commercial and industrial uses with varying land use intensity. The Metrocenter area has been rezoned as a Planned Unit Development with high development densities, mixed uses and strong pedestrian orientation.

• Tools to Implement Land Use Policies: Phoenix gives developers points toward density bonuses for including sustainability elements. The City’s Adaptive Reuse Program streamlines development for the adaptation of old buildings. The City has been conducting some outreach to property owners along the corridor as part of the North Mountain Area Plan. The land use planning that resulted in a rezoning of the Metrocenter area was conducted in partnership with the owners of that property.

Performance and Impacts of Policies: Medium-High • Performance of Land Use Policies: 302 projects, valued at $10.1 billion, have been completed or are

under construction along the region’s existing LRT line since 2005. The developments contain a total of over 22,000 residential units and over 16 million square feet of commercial/office space. This development is high density in the downtown areas and medium-high density in the station areas outside of downtown. The developments typically have transit-friendly characteristics.

• Potential Impact of Transit Investment on Regional Land Use: The corridor has not been intensely developed and has many opportunity sites for redevelopment. There are 24 acres of vacant land plus excess surface parking areas. The Metrocenter redevelopment is large enough to be considered regionally significant. Phoenix is one of the fastest growing metropolitan areas in the United States with a robust real estate market, which indicates that significant transit-oriented development is possible.


near existing and proposed light rail stations. The City provides density bonuses for affordable housing and increased development entitlements for projects that provide long-term affordable units. The Metrocenter Planned Unit Development will include some legally binding affordable housing, including senior housing, once completed.

Dunlap Ave

Peoria Ave

35th A

ve

NORTHWEST PHASE II LIGHT RAIL EXTENSIONPhoenix, Arizona

25th Ave/Dunlap Ave

Mountain View Rd/25th Ave

Metrocenter

31st A

ve I-17

25th A

ve

23rd A

ve

19th A

ve

TC

Butler Rd

K

0 0.25 0.50.125Miles

Valley Metro Rail / Station!(

Northwest Extension Phase II / Station!( Existing Park-and-RideExisting Transit CenterTC

LEGEND

Mountain View RdTC

Future Transit CenterTCPotential Park-and-Ride

19th Ave/Dunlap Ave


New Starts Project Development(Rating Assigned November 2019)

The rating reflected in this profile was based on the information submitted by Valley Metro and the City of Phoenix with its Engineering request in July 2019. Subsequent to the completion of FTA’s evaluation in November 2019, Valley Metro and the City of Phoenix submitted a revised request on November 21, 2019, lowering the CIG share to $158.12 million (39.4 percent). That change cannot be reflected in the project profile until FTA receives a complete revised submission from Valley Metro and the City so the rating can be updated accordingly.

Summary Description


Total Capital Cost ($YOE): $401.33 Million (Includes $24.6 million in finance charges)

Section 5309 CIG Share ($YOE): $198.26 Million (49.4%) Annual Operating Cost (opening year 2025): $3.15 Million




Local Financial Commitment Rating: Medium-High

Project Description: Valley Metro plans to extend its light rail system from the existing end of line station in Northwest Phoenix to the Metrocenter Mall. The project includes the purchase of three light rail vehicles, the relocation of the existing Metrocenter transit center, and the construction of a park and ride lot with a total of 260 parking spaces. The service is to operate every 12 minutes for most of the weekday, every 20 minutes during late night and early morning hours, and every 15 to 20 minutes on the weekends.

Project Purpose: The project is intended to improve connectivity across Interstate 17, provide easy access to the region’s light rail system for various communities in north and west Phoenix, Glendale, and Peoria, and support transit-oriented land-use planning in the corridor, including the planned redevelopment of the Metrocenter Mall site. The project links Metrocenter to existing regional activity centers and major activity nodes such as the North Central Avenue office corridor, Phoenix Sky Harbor International Airport, Arizona State University, and downtown Phoenix. The project improves transit service in a corridor where 26 percent of the population lives below the poverty level and 17 percent of the households own no cars.

Project Development History, Status and Next Steps: The City of Phoenix selected the locally preferred alternative in November 2014, and it was adopted into the fiscally constrained long range transportation plan in June 2015. The project entered New Starts Project

Development in June 2017. Valley Metro completed the environmental review process with receipt of a Finding of No Significant Impact in February 2019. Valley Metro expects to enter Engineering in early 2020, receive a Full Funding Grant Agreement in mid-2020, and start revenue service in April 2025.

Significant Changes Since Last Evaluation (November 2018): The project cost increased from $340.80 million to $401.33 million due to design refinements and additional contingency being added to the budget. The amount of CIG funding requested increased from $168.70 million to $198.26 Million, with the CIG share decreasing from 49.5 percent to 49.4 percent. The opening year changed from 2023 to 2025 due to contingency being added to the schedule.


Federal: Section 5309 New Starts $198.26 49.4%

Local: City of Phoenix Proposition 104 Sales

Tax Revenues and Bond Proceeds

Maricopa County Proposition 400 Public Transportation Fund Excise Tax Revenues

$173.07

$30.00

43.1%

7.5%

Total: $401.33 100.0%


AZ, Phoenix, Northwest Extension Phase II (Rating Assigned November 2019)

Factor Rating Comments Local Financial Commitment Rating Medium-

High

Non-Section 5309 CIG Share +1 level The CIG share of the project is 49.4 percent.

Project Financial Plan Medium

Current Capital and Operating Condition (25% of local financial commitment rating)

Medium • The average age of Valley Metro’s bus fleet is 6.81 years. • The most recent bond ratings for Valley Metro, issued in May 2019, are as follows:

Fitch Ratings, Inc. AA and S&P Global Ratings AA+. • Valley Metro’s current ratio of assets to liabilities as reported in its most recent

audited financial statement is 1.1 (FY2018). • There have been no service cutbacks or cash flow shortfalls in recent years.


High • Approximately 98.7 percent of the non-Section 5309 CIG capital funds are committed or budgeted, and the rest are considered planned. Sources of funds include Maricopa County Proposition 400 Public Transportation Fund (PTF) excise tax revenues, and City of Phoenix Proposition 104 sales tax revenues and bond proceeds.

• Approximately 78.4 percent of the funds needed to operate and maintain the transit system in the first full year of operation are committed or budgeted, and the rest are considered planned. Sources of funds include FTA Section 5307 Urbanized Area Formula funds, Section 5310 Enhanced Mobility of Seniors & Individuals with Disabilities funds, farebox revenue, contributions from the cities of Phoenix, Tempe, Mesa, and Chandler, and Maricopa County, and Proposition 400 PTF excise tax revenues.


Medium-Low • Growth in capital revenue assumptions is optimistic compared to recent historical experience.



• Operating cost estimates are reasonable compared to recent historical experience. • Valley Metro has access to funds via additional debt capacity, cash reserves, or

other committed funds to cover unexpected cost increases or funding shortfalls equal to at least 15.7 percent of the total CIG capital cost and 27.6 percent of annual system wide operating expenses.


New Starts Project Development (Rating Assigned September 2019)

LAND USE RATING: Medium-Low


• The station areas have an average population density of 2,750 persons per square mile, which rates Medium-Low by FTA benchmarks. The project would serve a total of 143,100 employees by a one seat ride, which rates Medium-High by FTA benchmarks. The average daily parking cost in the Phoenix central business district (CBD) is $13, which corresponds to a Medium-High rating. There is no existing affordable housing in project station areas and the ratio of station area to county LBAR housing is therefore 0.00, corresponding to a Low rating.

• Development in the project corridor is mostly low density commercial and industrial with surface parking fronting most buildings. At the end of the corridor is an aging suburban mall surrounded by a large surface parking lot.

• The main roads in the corridor typically have sidewalks but they lack shade and are not comfortably separated from the roadway. Some of the industrial areas have no pedestrian facilities.

ECONOMIC DEVELOPMENT RATING: Medium

Transit-Supportive Plans and Policies: Medium • Growth Management: Arizona requires municipalities to identify targeted growth areas tied to

infrastructure improvements as part of their local comprehensive plans and requires them to have policies and implementation strategies for promoting a regional system of open space. Phoenix is engaged in an ongoing planning effort to concentrate growth in identified cores and corridors.

• Transit-Supportive Corridor Policies: Phoenix’s General Plan and North Mountain Area Plan both recommend implementing policies and ordinances to support infill development with a scale and character supportive of transit near light rail lines. The City recently passed a Complete Streets ordinance and is emphasizing improving the pedestrian environment. Among the three stations in the corridor, Metrocenter is the only area where conceptual planning for transit-oriented development (TOD) has already occurred.

• Supportive Zoning Regulations Near Transit Stations: The two eastern-most station areas in the corridor have not been rezoned for TOD and are primarily zoned for commercial and industrial uses with varying land use intensity. The Metrocenter area has been rezoned as a Planned Unit Development with high development densities, mixed uses and strong pedestrian orientation.

• Tools to Implement Land Use Policies: Phoenix gives developers points toward density bonuses for including sustainability elements. The City’s Adaptive Reuse Program streamlines development for the adaptation of old buildings. The City has been conducting some outreach to property owners along the corridor as part of the North Mountain Area Plan. The land use planning that resulted in a rezoning of the Metrocenter area was conducted in partnership with the owners of that property.

Performance and Impacts of Policies: Medium-High • Performance of Land Use Policies: 344 projects, valued at $11 billion, have been completed or are

under construction along the region’s existing LRT line since 2005. The developments contain a total of over 25,000 residential units and over 18 million square feet of commercial/office space. This development is high density in the downtown areas and medium- to high density in the station areas outside of downtown. The developments typically have transit-friendly characteristics.

• Potential Impact of Transit Investment on Regional Land Use: The corridor has not been intensely developed and has many opportunity sites for redevelopment. There are 24 acres of vacant land plus excess surface parking areas. The Metrocenter redevelopment is large enough to be considered regionally significant. Phoenix is one of the fastest growing metropolitan areas in the United States with a robust real estate market, which indicates that significant transit-oriented development is possible.


near existing and proposed light rail stations. The City provides density bonuses for affordable housing and increased development entitlements for projects that provide long-term affordable units. The Metrocenter Planned Unit Development will include some legally binding affordable housing, including senior housing, once completed.

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Peoria Ave

35th A

ve

31st A

ve I-17

25th A

ve

23rd A

ve

19th A

ve

Mountain View Rd/25th Ave

Metrocenter

TC

Mountain View Rd TC

Dunlap Ave 25th Ave/Dunlap Ave

19th Ave/Dunlap Ave

Butler Rd

K NORTHWEST EXTENSION PHASE IIPhoenix, Arizona LEGEND ! Valley Metro Rail / Station ( TC Existing Transit Center TC Future Transit Center

Miles ! Northwest Extension Phase II / Station Existing Park-and-Ride ( Potential Park-and-Ride 0 0.125 0.25 0.5

Documents

South Central Light Rail Extension Phoenix, Arizona New Starts … · 2020. 8. 27. · Project Development History, Status and Next Steps: The City of Phoenix selected the locally