Seattle streetcar already running short

Seven months before Seattle christens its new South Lake Union streetcar, the expected operating costs are increasing.

And the income from train and station advertising, though robust, is going to arrive more gradually than planned.

So, Mayor Greg Nickels is asking the City Council to give the streetcar a line of credit -- up to $3 million -- to be repaid within 10 years. The council is expected to decide the issue next month.

The mayor's transportation adviser, Mike Mann, said new advertising money and fares paid by riders will eventually close the gap.

Metro Transit, which will operate the trains, plans to bill the city $2 million a year, compared to the city's original $1.5 million estimate. Startup costs will add $500,000, compared to the early estimate of $144,000. The current shortfall is about $1.5 million for the first two years of operations, said a City Council staff analysis issued this week.

Rising costs would mean that the streetcar would soak up a greater share of Seattle's Metro Transit allotment than earlier thought, limiting bus-service expansion to other neighborhoods.

Workers are halfway done building the 1.3-mile line, from the Westin Hotel to the Fred Hutchinson Cancer Research Center, set to open in December. The project has been controversial, as naysayers initially said the city was catering to billionaire Paul Allen's Vulcan, the biggest landowner along the route.

Costs rise

South Lake Union Streetcar is on track to open in December, but expected operating costs have gone up, forcing the city to consider loaning the project money.

Operating costs were originally expected to be $1.5 million a year, but Metro Transit is now planning to bill the city $2 million a year.

Startup costs were estimated at $144,000, but have risen to $500,000.

The city sought 10-year advertising deals, hoping a big up-front windfall would cover operating subsidies until mid-2009, when Metro would take over three-fourths of that cost. But the long-term deals didn't materialize, while the city dropped its plan to sell naming rights for the whole line.

The good news is that advertisers have pledged more than $1.1 million at surprisingly high short-term rates, averaging $28,400 a year per station. All three trains and six of 11 stations have sponsors, and officials hope to recruit five more by opening day. "There's a lot of confidence those will be snapped up," said Nickels spokesman Marty McOmber.

City Councilman Nick Licata, an early opponent, has long warned operating costs would rise.

"I think it's unfortunately indicative of how we're not paying attention to the more basic services around the city. How did Seattle become unaffordable? It's through a number of these projects that benefit a small sector of the population."

The public might not notice the difference, he said, since a big boost in bus service will happen anyway. Voters last fall approved a sales-tax measure, known as "Transit Now," for increased Metro service.

Licata said the streetcar may need a new neighborhood tax for operations. Landowners already approved a property tax to underwrite half the $52 million construction cost -- making the streetcar a bargain to many city leaders.

Mike Lindblom: 206-515-5631 or mlindblom@seattletimes.com

Information in this article, originally published May 11, 2007, was corrected May 11, 2007. A previous version of this story incorrectly stated that landowners along the route of Seattle's South Lake Union Streetcar are paying a property tax to cover the entire $52 million cost for construction and trains. The landowners are paying half that cost.