How Denver Leaders Pulled Off a Public Transit Miracle

Voters agreed to tax themselves for a commuter rail network. Then a budget shortfall almost doomed the whole project. Now it’s on track to completion.

DENVER-The city's light rail system, FasTracks, is slated to be complete by 2018. Voters agreed to a tax increase to finance it in 2004. Photo by Fawn Johnson/National Journal.
National Journal
Oct. 1, 2014, 10:04 a.m.

This art­icle is part of a Next Eco­nomy series on Den­ver and its grow­ing mil­len­ni­al pop­u­la­tion.

DEN­VER—Bill Sirois de­scribes the first four months of 2007 in his of­fice as “chaot­ic.” The re­gion­al trans­it au­thor­ity where he works as a seni­or man­ager had just learned that they were $1.5 bil­lion over budget on a light-rail sys­tem that they had prom­ised to de­liv­er with­in a dec­ade. Three years earli­er, Col­or­ado voters had ap­proved a high-pro­file bal­lot meas­ure to raise $4.7 bil­lion through sales taxes to build the train sys­tem called Fas­Tracks. Now the costs were pro­jec­ted to run well over $6 bil­lion.

The money from avail­able tax rev­en­ues might al­low the rail net­work to be fin­ished by 2042, in­tern­al ana­lysts told the Re­gion­al Trans­port­a­tion Dis­trict (RTD).

“So there was kind of like, ‘Ah, what are we do­ing?’ ” Sirois re­mem­bers. ” ‘We got it passed by the voters, and how can we even tell them that we can’t do it when we said we were go­ing to do it?’ “

The pro­ver­bi­al doo-doo hit the fan when the short­fall went pub­lic. Voters were un­der­stand­ably up­set. Crit­ics of Fas­Tracks didn’t hes­it­ate to say, “I told you so.” At one point, the cost of the pro­ject grew to al­most twice the ori­gin­al price. The RTD man­ager who had planned the whole pro­ject even­tu­ally resigned.

The re­ces­sion of 2008 hit not long after, which took the scape­goat spot­light off of RTD. But the trans­it au­thor­ity was still stuck with a big rail plan and about half the money they needed to build it. They had two op­tions. They could scrap their con­struc­tion sched­ule and build one line at a time as tax rev­en­ues trickled in. Or they could get cre­at­ive.

Bill Owens, the Re­pub­lic­an gov­ernor at the time, wanted the first op­tion, ar­guing that it was the re­spons­ible and eco­nom­ic­al way to go. Den­ver’s may­or dis­agreed, ar­guing that the trans­it sys­tem was de­signed to bol­ster the re­gion as a whole and not just the lucky areas that got their rail lines first.

The cre­at­ive op­tion won out. “The may­or said, ‘No, we’re go­ing to build the whole god­damned thing at one time,’ ” says Tom Clark, CEO of the Metro Den­ver Eco­nom­ic Group, a re­gion­al co­ali­tion that pushed for Fas­Tracks for more than a dec­ade.

That may­or, by the way, was John Hick­en­loop­er, who was also the face of the voter cam­paign three years earli­er to raise sales taxes for Fas­Tracks. He is now Col­or­ado’s gov­ernor and a prom­in­ent na­tion­al Demo­crat. Hick­en­loop­er was one of many busi­ness and civic lead­ers in metro Den­ver who viewed mass trans­it as the key to mak­ing the city a ma­jor met­ro­pol­it­an force. They didn’t want Den­ver to be prom­in­ent just in the United States. They wanted to com­pete with cit­ies throughout the world. You need people movers for that, or busi­nesses won’t loc­ate in your re­gion.

That prin­ciple con­tin­ues to be em­braced by Hick­en­loop­er’s suc­cessors. City plan­ners say that a trans­it net­work is the only way to foster dens­er pop­u­la­tions, which are crit­ic­al to a grow­ing urb­an eco­nomy, without snarling up traffic.

“We need to em­brace a cul­ture of trans­it. Not just mass trans­it, but you see a lot of fo­cus on bikes, bike shar­ing, and the like,” says Paul Wash­ing­ton, ex­ec­ut­ive dir­ect­or of May­or Mi­chael Han­cock’s of­fice of eco­nom­ic de­vel­op­ment. “How we de­vel­op this city is in the spir­it of sus­tain­ab­il­ity and ver­tic­al­ity. So we want to be a much more dense city and grow up rather than out.”

City lead­ers also have the fu­ture of Den­ver in mind. Trans­it is the pre­ferred meth­od of trans­port­a­tion (along with bi­cycles) for young adults, a group that the city has ag­gress­ively and suc­cess­fully cour­ted. Den­ver is a top-tier des­tin­a­tion for mil­len­ni­als, ac­cord­ing to demo­graph­ers. One thing mil­len­ni­als don’t seem to want is to own cars. Even when they do own cars, they cer­tainly don’t want to com­mute in them.

Aside from Cali­for­nia, rail trans­it in the West is a re­l­at­ively new idea. Phoenix’s light rail line be­came op­er­a­tion­al in 2008. The Las Ve­gas mono­rail, which is only 4 miles long, came on­line in 2004. The cul­ture of these cit­ies is built on cars. Den­ver res­id­ents think noth­ing of driv­ing a few hours to the mul­tiple moun­tain re­sorts nearby. Throughout the en­tire moun­tain West, the rur­al spaces between smal­ler towns and large met­ro­pol­it­an areas are vast. Even the Den­ver In­ter­na­tion­al Air­port—the metro re­gion’s pride and joy—is in the middle of nowhere. It is 25 miles from down­town, sur­roun­ded by, well, a cow field.

The driv­ing cul­ture of Den­ver sug­gests that an in­ter­con­nec­ted rail net­work was nev­er a giv­en here. That may be why city lead­ers are still awed that it is ac­tu­ally hap­pen­ing. Maybe it was the sheer polit­ic­al ef­fort—from an un­likely co­ali­tion of busi­nesses, en­vir­on­ment­al­ists, and city plan­ners—that sold Den­ver res­id­ents on a rail sys­tem. Or maybe it was the stub­born­ness of Hick­en­loop­er and his fol­low­ers in in­sist­ing that the Den­ver re­gion be built up as a whole, rather than neigh­bor­hood by neigh­bor­hood.

Whatever the im­petus was, it was strong. A new head of RTD, Phil Wash­ing­ton, took over in 2009. He plunged all of his ef­forts in­to build­ing every line on the rail sys­tem with whatever money the agency could scrounge up. Where the funds came from didn’t mat­ter (as long as it was leg­al). RTD has fin­anced pieces of the net­work with fed­er­al grants that nobody knew about, and oth­er pieces by tak­ing out a mort­gage to the land as­sets. One small sub­urb of Den­ver offered to pony up $30 mil­lion to $40 mil­lion for a fast build-out of a rail con­nec­tion to down­town, which then al­lowed RTD to seek match­ing in­vestors. 

RTD is the first trans­it agency in the coun­try to suc­cess­fully at­tract private-sec­tor in­vest­ment for a light-rail sys­tem. In the world of pub­lic-private part­ner­ships, tolling ar­range­ments for drivers are more com­mon be­cause they are prof­it­able for the in­vestor and be­ne­fi­cial to the city. Trans­it, al­most by defin­i­tion, is a rev­en­ue-neut­ral pro­pos­i­tion at best and a money loser at worst. After all, the idea be­hind trans­it is to provide af­ford­able mo­bil­ity to every­one in a re­gion, ideally to wherever they want to go, even the poor areas. That’s ex­pens­ive, even though the es­tab­lish­ment of such a sys­tem can be a boon to a re­gion’s eco­nomy. 

RTD man­aged to win the trust of a few prom­in­ent in­fra­struc­ture firms by so­li­cit­ing their design ideas first. RTD’s Phil Wash­ing­ton in­vited a slew of busi­ness lead­ers to an event in down­town Den­ver seek­ing their in­put. Then RTD ar­ranged the gov­ern­ment pro­cure­ment sys­tem around those ideas.

Clark says it was a geni­us move on Wash­ing­ton’s part. “He calls me up and he says, ‘I’m go­ing to in­vite about 700 CEOs in­to Den­ver and tell them that we’re wide open at RTD to mon­et­ize any­thing we’ve got.’ And I star­ted laugh­ing and said, ‘Phil, so you’re try­ing to pimp these guys for money.’ And he says, ‘You bet!’ “

Now, RTD has a con­tract with a mul­tina­tion­al busi­ness group—part rail com­pany, part Brit­ish bank, part glob­al en­gin­eer­ing firm—to build the rail line to the air­port. That’s slated to be fin­ished in 2016. The agree­ment came about be­cause RTD ac­cep­ted a bid for them to build the line in which they use their de­sign­ers’ vis­ion to save money, with­in a set time frame, and with­in cer­tain para­met­ers. Den­ver com­mit­ted to pay a flat fee. The con­ces­sion­aire could de­cide how to use it. Every­body’s happy.

“We’re ba­sic­ally pay­ing them a lease pay­ment every year. And so they priced it. I don’t know what their pri­cing is. They priced it, and we agreed to that price,” Sirois says.

This stitched-to­geth­er fin­an­cing plan will al­low Fas­Tracks to be al­most en­tirely com­plete by 2018, just one year after the ini­tial pro­jec­tion made in 2004, be­fore the eco­nomy tanked, be­fore the budget short­falls nearly sank the whole pro­ject. In the trans­it world, that’s al­most un­heard of.

Clark, a self-pro­fessed policy geek, says he has spent a lot of time try­ing to fig­ure out just how it happened. He hasn’t yet come up with a sat­is­fact­ory an­swer. “A lot of this is really about good things gone bad gone good. It’s about the re­si­li­ency of the com­munity.”

What We're Following See More »
Mueller Agrees to Testify, but Only in Private
2 days ago
Trump Loses in Court Again
4 days ago
Trump Pulls the Plug on Infrastructure
4 days ago
Parties Go to Court Today Over Trump Banking Records
4 days ago
Tillerson Talking to House Foreign Affairs
5 days ago

"Former Secretary of State Rex Tillerson was spotted entering a congressional office building on Tuesday morning for what a committee aide told The Daily Beast was a meeting with the leaders of the House Foreign Affairs committee and relevant staff about his time working in the Trump administration. ... Tillerson’s arrival at the Capitol was handled with extreme secrecy. No media advisories or press releases were sent out announcing his appearance. And he took a little noticed route into the building in order to avoid being seen by members of the media."


Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.