ADMINISTRATIVE REPORT

Date: June 14, 2001
Author/Local: D.H.Rudberg/7300

RTS No. 02181

CC File No. 5558

Council: July 24, 2001

TO:	Vancouver City Council
FROM:	General Manager of Engineering Services in Consultation with the Directors of Current Planning and City Plans
SUBJECT:	Public Private Partnership Review - Downtown Heritage Railway

RECOMMENDATION

A. THAT Jane Bird be retained to review Public Private Partnership options for the development of the Downtown Heritage Railway.

B. THAT funding for this study, in the amount of $60,000, be provided from the budgeted funds remaining from the extension of the Heritage Railway to Quebec Street (Order group CA2EA6A, order 30003438).

COUNCIL POLICY

The City of Vancouver Transportation Plan (1997) supported the use of transit in meeting our future transportation growth needs.

Council supports establishing and preserving streetcar corridors in the False Creek area and Downtown.

Council has established that planning for the Southeast False Creek as a demonstration project for a sustainable community, will include a potential streetcar service.

The City has consistently supported the introduction of a demonstration electric rail transit service along the south side of False Creek, with the potential of providing regular service linking the high employment, residential and activity nodes in and around the Downtown core.

PURPOSE

This report seeks approval and funding for a study on opportunities and options for a Public Private Partnership in the expansion of the Downtown Heritage Railway to provide regular transit services linking Granville Island to the Central Waterfront.

BACKGROUND

The Downtown Heritage Railway initiative, in conjunction with a variety of progressive transportation services, further solidifies Vancouver as a world class city. Its purpose is to link a number of activity centres in the Downtown (residential, employment, tourist, shopping, etc.) which have expanded the core beyond reasonable walking limits. As a transportation service, it will provide a transit alternative to the automobile for commuters, tourists, shoppers and a variety of other users. Another vital feature is that it will link into other transit services, such as SeaBus, SkyTrain, West Coast Express and regular bus services to provide a seamless transit network.

To further these objectives in the short term Council has approved the development of a demonstration line from Quebec Street to Granville Island. This line operates two historic interurban rail vehicles, using volunteers on Saturday and Sunday afternoons during the summer months. This line was extended this year to Quebec Street to enhance its connection with Science World and the Main Street SkyTrain Station. The demonstration line consistently enjoys support from users and the broader community.

While the demonstration line enjoys short term success, there is a medium to long term vision to expand and integrate the demonstration line into the transit network serving the Downtown area using modern equipment. Following a consultant study, in February 1999 Council approved the following recommendations:

A. THAT, extending from the South False Creek line, Council endorse a routing from Science World to Waterfront Station via Quebec, Columbia and Cordova Streets as Phase I, and a general routing form Science World to Roundhouse Community Centre, along Pacific Boulevard and Davie Street, as Phase II of the Downtown Streetcar system.

B. THAT Council instruct staff to consider the proposed Streetcar corridors when undertaking rezoning, development permit applications, area planning studies, or other projects that affect roads in locations that are affected by the study.

C. THAT the General Manager of Engineering Services be authorized to seek senior government funding for a portion of the first part of the Streetcar project, from Granville Island to Waterfront Station.

The focus of this report is to pursue the funding strategy further to the aboveRecommendation C.

DISCUSSION

Corridor Preservation

In the last few years, the City has been pursuing corridors to facilitate the implementation of the Downtown Heritage Railway. It is felt that, wherever possible, a separate right-of-way should be utilized in order to free the operation of this system from road congestion. This would significantly enhance the efficiency and attractiveness of this form of transit service now and more so in the future. The intent is to provide high frequency convenient service for quick trips into, and around, the Downtown core.

As a result, planning for rail corridors has been taken into account in the street rights-of-way serving Concord Pacific, Central Waterfront and Bayshore developments. More recently, possible extensions into the False Creek Flats, to serve the emerging high-tech development, have been considered. Included in these deliberations, is a potential access route into a maintenance facility near Clark Drive, which would also allow a transfer connection to serve the VCC SkyTrain Station.

Cost Estimates

Consultant studies in 1998 projected that the initial phase of the Trolley development, Granville Island to Waterfront Station, would provide a high recovery in terms of operating cost. The study indicated that the initial phase would recover approximately 100% of the $3.3 million operating cost. Funding for the Capital cost for this section was estimated to be $42.3 million (1998 costs) and was assumed to be funded separately.

While most of the original assumptions in estimating the Capital cost remain valid today, there are a number of changing conditions which could further enhance the economic return on this proposal. These include:

· Residential employment and tourist growth in and around the core remains strong and will further enhance ridership.

· The False Creek Flats, in particular, is emerging as a strong employment growth area with a High-Tech Park development alone projected to generate 10,000 employees. Opportunities exist to either extend or realign the service into these areas. There are additional opportunities to extend the Downtown Heritage Railway further east to serve Finning and the VCC SkyTrain Station.

· There are several successful operating systems in the world with objectives similarto those of the Downtown Heritage Railway. These models demonstrate how successful an inner-city rail transit system can be in meeting public transportation needs.

Funding

It is clear that some public financing is required to cover the Capital costs of the first phase of the Downtown Heritage Railway. It was always expected that assistance would be required from senior levels of government, as well as local funding to meet the Capital cost requirements.

More recently, there has been growing interest in the use of Public Private Partnerships in the financing and development of transportation projects. Of particular interest, is the opportunity to attract private capital to offset the public costs. It is therefore proposed that a preliminary investigation be undertaken on the opportunities for a Public Private Partnership.

Consultancy

A preliminary investigation of the use of Public Private Partnerships would need to examine the following issues:

· Review of past work, including ridership and capital and operating cost assumptions. This would not include new modeling and costing work. The review would note emerging land use patterns and their affect on ridership.

· Assessment of project finances, based on Capital and Operating cost assumptions contained in previous work.

· Examine the experiences of comparable systems worldwide particularly those incorporating a public/private partnership.

· Review possible operating scenarios.

· Review the Public Private Partnership options and opportunities relative to their possible application to a Downtown Heritage Railway. This would include an outline of future actions should Council wish to pursue this model.

In examining the study needs, it was concluded that Jane Bird would be ideally suited to undertake this assignment. In discussions with her, she recommended that Macquarie North America Limited be retained through her to undertake the bulk of the technical work.

The reasons for retaining Ms. Bird relate to her knowledge of the city and its transportationobjectives, particularly related to her work on the Broadway SkyTrain project and the review of the Richmond Vancouver Rapid Transit Link. The Richmond Vancouver project is particularly well suited because it examined opportunities for PPP application in the corridor. It has also been confirmed that Ms. Bird is available for this short term assignment.

Macquarie was identified as a suitable sub-consultant for the technical analysis because of their extensive expertise in PPPs related to other transit systems, particularly similar rail systems. They have undertaken work in the Lower Mainland on the Richmond Vancouver Rapid Transit Project and on a Fraser River Crossing. They are also working closely with the City in modelling transportation demand and ridership in the Downtown core for the Richmond Rapid Transit Project. A draft work plan was requested and submitted for the work on the Downtown Heritage Railway. This is attached (on file in City Clerk's Office) to this report.

The estimated budget for this study is $60,000 and is recommended to be funded from the Capital funds remaining from the extension of the demonstration project to Quebec Street. That funding is located in Order group CA2EA6A and order 30003438.

SUMMARY

It is uncertain whether the Public Private Partnership model is a suitable one for the financing, development and delivery of the Downtown Heritage Railway project. The intent of this study is to address these issues as part of the effort to pull together a financing package for this project.

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(c) 1998 City of Vancouver