urbanSTL

Bastiat wrote:In the old days, the private companies who built the rails were also land speculators. The lines often went to places that had no residences whatsoever, but the owners were entreprenuers. Shaker Heights, Ohio was built this way as was Davis Place in Clayton (created by the owners of the Wydown trolley line).



Government is unable to perform this entreprenueral function and its lines are only planned where there is already enough density that some people would almost have to ride it.

I think you bring up a great, though in some ways unrelated point. When you look at organizations like the New York and New Jersey Port Authority, you are looking at an organization that tackles not only transportation (airports, rail, bridges, ports, tunnels) but also has a separate real estate arm (responsible for things like the WTC).



But alas, when St. Louis thought about how we can develop an efficient and well funded transportation system, we split off everything into separate organizations, each with their hand out asking for cash, all under funded, and none with the financial means to step forward and take on large scale real estate development to capitalize on their projects, let alone develop world class facilities.



While I am not sold on the private sector operating transit in the 21st century (for all the work they did in the past, most seemed to go bankrupt without government aid), I do believe that St. Louis' transportation infrastructure would be much better off if we could create a central organization, like the Port Authority of St. Louis, with the ability to not only prioritize and fund regional projects (think new Mississippi Bridge and Metro funding vs. something like a new Page Ave. Bridge) but also the financial ability to gather properties around proposed improvements to capitalize on their creation.

While I am not sold on the private sector operating transit in the 21st century (for all the work they did in the past, most seemed to go bankrupt without government aid)

They only went bankrupt because of excessive government regulation, taxation, and subsidization of competition (building roads for automobiles and providing free access to all). The New York subway system was seized by public authorities ostensibly to freeze the rate of fare at a nickle. It is now $2 and much less safe and clean.

Streetcars died in most cities for a combination of reasons, mostly stupidity! For instance, streetcars were asked to do much more than just pay for themselves. In St. Louis, the city taxed the tracks, the cars, the overhead, the power plants, each passenger, and overall income. The trolley company was also required to pave the streets in which they ran as well as clear those streets of snow, keep them clean and water them in the summer to keep dust down. All those costs killed streetcars, because buses had no such requirements, the companies switched.

- APTA Streetcar and Heritage Trolley Site



When a private rail company went bankrupt in absense of these factors, it was a good thing because it meant that the poor management could replaced by a better company. With public ownership by Metro, we have to endure their push for even more of our money. Clayton had to deal with delays in the building of a lightrail before, but under a private company, the story went differently. From Dickerson Terry's Clayton: A History:

By this time the track had been there for more than a year, but there was nothing else and the people of Clayton were growing cynical. Apparently the committee appointed to help the directors work out a plan failed to come up with anything, and on April 26, 1895, with nothing to show but the tracks, the company went bankrupt and was sold by the sheriff on the courthouse steps.



It was bought by the Lindell Railway Company, and by December of that year the trolley poles were up. Work went steadily forward and finally on Sunday, December 8, 1895, the hopes of Clayton were finally realized. The Forest Park and Clayton Railway became an established fact

-p60



Private rail companies have the advantage of being run on a for-profit basis. This means incentive to provide the lowest cost service at the highest quality to attract more riders.



A private firm also might advertise more. I couldn't imagine one spending the amount that it did on the county expansion, especially the tunnel and not even have prominent signs on the stations. Even this is true downtown. Yesterday I was by the station at 8th and Pine and a woman who had just gotten off work asked me if I knew where the Metro stop was. I pointed to the entrance that was across the street. How about some more billboards on the highway? Why would a bureaucrat bother, it's not like they would be reaping the benefits of the higher ridership and profits.

When you look at organizations like the New York and New Jersey Port Authority, you are looking at an organization that tackles not only transportation (airports, rail, bridges, ports, tunnels) but also has a separate real estate arm (responsible for things like the WTC).

I was thinking more along the lines of stockholders with a vested interest in seeing the streetcar/rail succeed. For an example, I'll quote again from Clayton: A History by Dickson Terry:

In 1892, the 700 acre Davis farm on the edge of Clayton was being surveyed for town lots. The farm was property of J.C. Davis of the St. Louis firm of Samuel C. Davis and Sons, a large dry goods company. Davis, the Watchman-Advocate reported, was a large stockholder in the Forest Park and Clayton streetcar line and foresaw a great future for the Clayton area

Chapter 19, p. 103



I emphasize this importance because such a structure of providing transportation would really impower those of us who see potential in St. Louis neighborhoods (Clayton's population was about 300 in 1892). Political entities like the Port Authority are always rife with corruption and political payoffs or handouts to friends and partners. Private ownership puts power in the hands of people who care.



Realistic Way that Private Streetcar companies could be started



I'll use Grand as an example. Suppose that a start-up streetcar company negotiates a deal with city hall for right-of-way down Grand from slightly north of the Fox Theatre down to Carondelete Park. Obviously, this board will select railway contractors with a good track record (project done on time, high quality, good safety, etc) to build the rail (opposed to higher the guys who did the Big Dig). They get all of their plans in place, and need funds, so they issue stock and bonds in the company to raise the necessary capital.



Who would buy stock in such an enterprise? People with a vested interest in the success of the rail. Off the bat, major investors would probably include St. Louis University (because the ease of transportation would attract more students as well as allow easy access between their campuses), the Fox Theatre (would benefit from easier access for patrons), and Cardinal-Glennon (ease of getting to work could lure more doctors, etc).



Restaurants in the area could buy in individually or maybe as a group to ensure that their eateries are made accessable by this line. Large property holders such as the Gills who see potential for revival in a neighborhood along the route would buy in as well. I'd imagine a good number of posters and lurkers on this forum would buy some stock as well in hopes that their newly rehabbed properties would appreciate in value.



The appreciation of property and gains from the new line would outweigh the potential loss if the streetcar didn't collect enough fare, etc so the challenge of attaining start-up would be met. As people with property whose value is tied to the performance of the line, the investors have a lot of incentive to make sure that it runs properly, not to mention the risk of operating costs surpassing fare collected.



It is likely that after the line is built, the areas along it would thrive and ridership would grow. Seeing past success as future promise, the line would acquire property along North Grand and acquire the right of way to extend the line to the water tower. It could also issue more shares of stock, which would probably be bought by land speculators itching to turn the area around (probably posters on this forum who made a killing on their purchase of stocks during the start-up).



This is just an idea, not a forecast of what would exactly happen...



City of St. Louis has to promote openness to private right-of-ways



A lot of people would write this off, citing that no business has tried this, but that may be because most figure the cost of dealing with the city would kill any chance of turning a profit (delays, months of permit application, years long studies, etc, etc). Joe Edwards, a man with a considerable amount of property along Delmar has pushed for a line down Delmar and the city is willing to allow it to happen. Perhaps if the city made it publicly known that they are willing to resell right of ways to private streetcar companies, there'd be more clamor to set them up? Why dedicate time and money to building a line when you are not even sure if the city will allow you? Also the city would have to pass a law banning taxes on individual tracks, passengers, trains, etc like they did on the old streetcar companies.



If the city could accomplish this, it would gain us national attention. We would be more "progressive" than cities like Portland that force their citizens to pay for public transport.

^ Well to be fair, his ideas are not exactly crazy or far fetched. I point again the the PATH train, which had been loosing money like craxy into the 1950's, but the Port Authority agreed to takeover the line only after it was agreed they could build the World Trade Centers on top of the downtown station. While this was a public-private development, the same principal can hold for St. Louis development. Imagine if all the open land that was say the Lemp Brewery and the Chouteau's Lake were owned by METRO or say a private company. These peices could act as the linchpins for a southside lightrail line, providing the draws on either end. Really no different and not so far fetched. The difference is that METRO in St. Louis is not well enough funded to own so much property.

steve wrote:Let's assume Metro was sold to private interests. Could it provide the services set out in its mission? Could it provide reliable, efficient, and affordable mass transit to the greatest number of people? In many senses, Metro has to operate at a loss at this point, especially with Metrolink. It has to make huge capital expenses to expand the system, while at the same time relying on only meager ridership levels/fare income. Overtime, and I mean the long haul, this will pay off, as it encourages more TOD and overall greater density in the region. But would a strictly profit-driven Metro be willing to swallow those losses for meager--if any--real long-term profits? Hardly, unless the owners were of a philanthropic persuasion. In which case, would they be any better at running Metro than as it is now?



Ultimately, some things just should be done because those things are the right things to do. Unfortunately, the market does not always reward what's right; it merely rewards what's profitable. In light of this fact, should we continue to argue for the privatization of everything?

You confuse the current situation of Metrolink as a permanent situation that would apply no matter what. The current losses and cost overrun are in fact, likely a symptom of public ownership. The people who run Metro do not personally benefit with increased ridership of Metrolink nor do they suffer the losses when Metrolink ridership drops. The current political stewardship also makes for a lot of red tape that makes cost cutting a hard feat instead of standard business practice.



As I also mentioned previously, the streetcar company could also profit by investing in real estate along the route to make profit as the land value increased. Investors who owned land along the route would have an interest in seeing the line succeed would invest money in the streetcar company.



Advertising would probably be pursued more actively for a private company running a rail. Why expend such a large amount of capital to provide a service that most of one's potential customers don't know much about?



This is not some crazy theoretical idea, this is established fact! Private companies built the subways and streetcars. It was government monopolization that killed them or greatly decreased their service. For example:

The supporters of city-owned subways promised that new lines would be built. The system, which by 1940 was a mix of private and public lines, would be unified under public control, which would mean economies of scale. The fare would never rise. The system would be run on "a self-sustaining basis," which would mean no tax dollars would have to be poured into it. The riders would no longer be "exploited" by entrepreneurs in search of profits. Unions would be controlled because their members would be governed by civil service regulations. There would be no closed shop. Every one of those promises has been broken.

Under public ownership, which was supposed to avoid "the greed" of entrepreneurs, the fare went from five cents in 1940 to a basic fare today of $1.50, a 2,900 percent increase. Yet the fare hikes produced more deficits. Thats because subways have sloppy management and outrageous expenses. Where are the consumer protection types and the Ralph Naders --always ready to complain about the private sector--to protect riders from high fares and poor service?

That quote is from a 1998 article, the fare is $2 or more I believe.

Riders have voted with their feet. Subway ridership has declined by some 50 percent in the last half century, even though the city's population has remained about the same (7.4 million by the 1940 census compared to 7.3 million in the last census). Recently, the ridership began to rise slightly (not to nearly the levels of 50 years ago, but a slight increase after years of decline) and that has caused problems. The system is so rundown that more riders means lots of crowding problems and delays.

^Sell the Subways by Gregory Bresiger



I quoted how cities excessively taxed streetcars and made the companies perform functions (such as shovel the street of snow) that were not required for busses.



Given this track record of squelching private initiative in mass transit while failing to deliver on the promises of public transportation, shouldn't we all be a little more critical government (euphemism for monopoly) control of transit and at least open to the idea of allowing private companies to compete?



I am not calling for the privatization of Metrolink (at this point at least). I am calling for the government to actively pursue selling right-of-ways on major streets such as Broadway, Gravois, Chouteau, Grand, Florissant, Delmar, etc to enable private companies to build lightrail or streetcars. This would cut all of the redtape and let the entreprenuers focus on the actual building of the line.



I think this would be far better than waiting years (or decades) to get a new line built. I think the profit motive will get our city transport back up and running much faster than supposed government benevolence.