Money train? Backers say Green Line will deliver dollars, development

LRT in downtown Minneapolis
Passengers get off the light rail in downtown Minneapolis on Friday, May 16, 2014.
Caroline Yang / For MPR News

The 11-mile, $1 billion Green Line doesn't have any passengers yet, but it's already carrying a trainload of hopes: that it will revive University Avenue, tie St. Paul and Minneapolis together and make rail a viable transit option for the region.

But Minnesota has run this experiment before, along the 12.3 miles of Blue Line track between Bloomington and downtown Minneapolis.

How did that work out? It depends on whom you ask.

The Metropolitan Council, which runs the transit system, says light rail is a success. More than one in eight transit trips in the Twin Cities is on a train. Light rail ridership topped 10 million passengers last year, up nearly a third since its first full year of operation in 2005. At 31,000 people a day, ridership is also nearly a third higher than planners expected -- for the year 2020.

Blue Line trains have already helped link the Mall of America, Minneapolis-St. Paul International Airport, downtown Minneapolis and other key job centers, said Met Council Chair Sue Haigh.

"We see a lot of commuting back and forth on that line," Haigh said. "It's a real value of these light rail developments."

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Critics say that's true, but there may have been better, cheaper ways to accomplish that.

The added costs and subsidies of trains crowd out other, more flexible transit, like buses, said Annette Meeks, CEO of the conservative Freedom Foundation of Minnesota and a former Met Council member.

"What you have is less bus rides and people having to walk further to get to the transit stops that are now train or rail stops, and a higher per passenger subsidy,"Meeks said. "No matter how you look at that, that's not really a good return investment for Minnesota taxpayers, especially for those folks in greater Minnesota that are never going to hop on board any of these trains."

Moving people around wasn't the only goal of the Blue Line. Boosters also hoped it would spark revitalization in Minneapolis.

Developer Norm Bjornnes
Norm Bjornnes stands beside a sculpture outside his Oaks Station Place development, located at the 46th Street light rail station on the Blue Line. It opened in 2012, an example of the recent development along the light rail in Minneapolis.
Tim Nelson / MPR News

At 46th Street in Minneapolis, developer Norm Bjornnes has two high-demand housing developments along the train line, including the Oak Street Station, squeezed literally into the parking lot of the light rail stop.

Without a ready alternative to cars and parking, he said, land like this wouldn't be practical to develop.

"Close to a third of the people that live at Station Place here don't even own automobiles. And that was one of our goals," said Bjornnes, adding that a new restaurant may open this summer.

Bjornnes's project is just one of 91 that have gone up along the Blue Line since 2003, boosting the market value of the real estate from $8.5 million to $154 million, according to Hennepin County data. There are more than 5,400 new housing units from Target Field to the Mall of America. Property tax revenue has gone up 20 fold and brought new homes and people to the city, the county says.

Others, however, aren't so sure the train has brought prosperity.

Research shows there's no difference between the building boom underway along the rail line compared to the rest of the city, said Sarah West, a Macalester College economics professor and a co-author of a study of development around the Blue Line.

That's an apples-to-oranges comparison, countered Hennepin County Commissioner Peter McLaughlin. The Hiawatha corridor was left blighted when it was cleared in the 1960s as an alternative to Interstate 35W, but never rebuilt. The area might never have filled back in without light rail, he added.

"For 25 years, essentially nothing happened in that corridor. There was this cloud of uncertainty hanging over it," McLaughlin said.

The Blue Line's track record is also helping boost interest in development along the Southwest Corridor to Eden Prairie, even before the deal to build that train gets done, he added.

West concedes that there may be more to the story. The most recent data is from 2010 - while the economy was still struggling through the effects of the Great Recession and housing crash, she noted. Longer term and rail's potentially more positive effects may show up when new numbers on development land use are out next year, she added.

The Met Council expects more than $2 billion will be invested in more than 120 projects built or planned within a half mile of the new Green Line service. The trains start running June 14.

Video: Macalester College professor Sarah West and Needham Hurst studied the economic impact of the Blue Line

Disclosure: Minnesota Public Radio and the Metropolitan Council are negotiating ways to reduce noise and vibrations from the newly built light rail line outside MPR headquarters under a contract agreed to in 2009.