How Stimulus Spending Ruined Buffalo -- Lessons for Honolulu

Recently Steven Manlanga of the Manhattan Institute authored "How Stimulus Spending Ruined Buffalo" in the Wall Street Journal. It describes that stimulus was the vehicle for ruining Buffalo, New York and at the core of this stimulus was none other but a light rail system:

• In his State of the State Address this month, New York Gov. Andrew Cuomo announced $1 billion in incentives to attract new investment. Too bad Mr. Cuomo ignores the factors that help keep areas like Buffalo inhospitable to new investment—namely steep tax rates and the high cost of government.
• Sometimes these schemes have done real harm. In the 1970s, the federal government decided to invest $530 million to build a 6.2-mile light-rail system through downtown Buffalo. It was supposed to further spur redevelopment.
• Opened in 1985 and anchored by a transit mall that banned cars, the rail line fell well below ridership projections—and downtown businesses suffered mightily from the lack of traffic. As Buffalo landlord Stephen P. Fitzmaurice wrote in 2009: "Walk down Main Street on the transit mall; aside from a few necessities like drug and cell phone stores, blight dominates." Last month the city received a $15 million federal grant to restore traffic to Main Street.
• These massive investment subsidies failed partly because officials were ill-suited to select the right projects and often instead gave money to favored insiders. Even former Mayor Anthony Masiello described the federal government's redevelopment funds as "a politically motivated system trying to please everybody."
• Image: Main Street in Buffalo: Emptied of traffic and stores by a light-rail infrastructure stimulus project in the 1980s.

Lesson 1: Factors that help keep areas like Honolulu inhospitable to new investment—namely steep tax rates and the high cost of government.

Lesson 2: Rail systems are planned as reasons to spur development. They do not. Quite the opposite they produce blight which cost even more money to reverse.

Lesson 3: Yet another rail line where projected rail ridership was a myth ( a lie.)

Lesson 4: Clueless politicians (i.e., Hannemann, Carlisle, Calwell) and appointed boards (HART) are “ill-suited to select the right projects and often instead gave money to favored insiders” (Mr. Malanga refers to pay-to-play politics which are prominent in Hawaii.)

Did You Ever Think that Honolulu Rail Will Turn ... Sexual?

Rail pimping university economics professor appears to be a real life pimp!

Serious City Mayor: Assessment, Priorities, Solutions, Policies(Tulsa)

Tulsa: Open for Business -- Tackling city's challenges requires willingness to embrace innovation, competition and market ideas. By Dewey Bartlett, Jr. Mayor of Tulsa, Oklahoma

This is an excellent article that summarizes how to run a city under financial distress. (Aren't they all?)

I quote this passage:
Water/Wastewater Study: As a result of the KPMG recommendations, the local public utility authority issued an RFP and engaged Infrastructure Management Group, a nationally recognized team of public infrastructure efficiency experts, to review the governance, operations, finances and strategy of Tulsa’s entire utility operations.

And I note that the highly reputed IMG quoted above conducted the Honolulu Rail financial report for Gov. Lingle, issued in December 2009. The report said that the likely minimum cost to build the elevated rail would be $7.2 Billion as opposed to City's $5.3 Billion estimate.

Demographia's W. Cox on Honolulu Infrastructure

Wendell Cox of St. Louis based Demographia.com made an interesting presentation at the 36th annual Business and Investment Conference organized by Smart Business Hawaii at the Ala Moana Hotel on January 11. Link to Cox's 1/11/12 slideshow.

Some of his important findings and suggestions include:

• Honolulu lost 50,000 residents between 2000 and 2009 in terms of domestic migration. Its taxes, jobs, congestion, housing prices, etc. have caused a loss of domestic residents to other Hawaii counties or other states.
• Hawaii was 8th highest in taxation in 2009 in the U.S.
• Honolulu housing affordability was the worst in the U.S., about three times worse that the US average!
• From the U.S., only Los Angeles and Honolulu are included in the 25 most congested cities in the world.
• Several other cities in the US have gone bankrupt and Honolulu is racing to bankruptcy with multi-billion dollar liabilities (pensions, sewers, rail, etc.)
• Politicians are ignorant of the fast approaching demographic time bomb of Baby Boomers who are switching from taxable paychecks to pensions and healthcare.
• Honolulu rail ridership projections are "rosy."
• Cautions about the rail's budget "You Won’t Know the Bill Until It’s Too Late"

Follow the Money... Follow the Loop ...

Urban Rail and Terrorism

The recent article "For Transit Agencies, Terrorists Are Moving Targets" in the magazine of the New Jersey Transportation Planning Authority raises many critical issues relating to the security of urban rail systems.

• Security experts and transit officials alike all but guarantee that some intentional tragedy will, sooner or later, befall the transit infrastructure of a major American city.
• al Qaeda and other terrorist organizations have also struck mass transit. Since 2011, bombings have taken place on transit systems in Mumbai (2002, 2003 and 2006), Madrid (2004), Moscow (2004 and 2010) and London (2005).
• According to the Mineta Transportation Institute (MTI) Data Base of Terrorists Attacks against Public Surface Transportation, over 4,000 people were killed in 1,434 attacks between 2004 and 2010.
• Transit infrastructure by its very nature presents a ripe target, terror experts say. While airline passengers have to go so far as to take off their shoes and submit to controversial full-body scans, transit passengers move freely through portals like ghosts. And what passengers can do, so can couriers of bombs, nerve gas and anthrax.
• To combat everyday crime, such as theft, that takes place on their systems, transit agencies have long maintained their own police forces, or contracted out to other law agencies.
• Regardless of the money that Washington, D.C., does not provide, transit officials say that vigilance is their most important resource. Waiting for a threat that may never emerge—scanning subway platforms day-in, and day-out—can, however, be a mind-numbing task.

The bottom line is that:

(1) FTA does not provide funds for security,

(2) Substantial funds are necessary just to combat groping, pickpocketing and other petty crime, and,

(3) Rail transit security is nearly impossible to accomplish at any level comparable to aviation, but the cost for it is very high given the number of stations and passengers (and potential criminals and terrorists) that utilize the rail systems.

In the picture below from LA's Gold Line rail one can see six security officers (that is, six salaries and benefits) and no passengers!