Rails to Sales
Executives Wake Up to Public Transportation as Good Business

By KEITH SCHNEIDER

Even though Michigan, the nation’s eighth largest state, has a reputation for designing and managing complex industrial projects, its record of providing residents with public transit is worse than any other large state, according to transportation specialists.

That could change, however, now that some of Michigan’s leading business executives are putting their minds and political muscle into designing, funding, and lobbying for 21st century transportation. Along with moving people to and from jobs, more business executives now view public transportation as a vital investment for improving quality of life, reducing congestion, and strengthening the economic competitiveness of Michigan’s metropolitan areas.

Economic Stimulus
Business leaders say it’s about time they got involved.

Michigan’s legislators and executives spent decades ignoring public transportation while, across the country, city after city either modernized existing lines or introduced entirely new bus, rail, and other public transit systems.

New York, Washington D.C., Atlanta, Dallas, San Francisco, Boston, Chicago, St. Louis, Philadelphia, and Baltimore are among the long list of metropolitan regions that invested heavily in public transportation, particularly in the last 25 years. They have since registered strong gains in housing, employment, new company start-ups and expansions, and other measures of economic development.

Chicago residents in the early 1990s, for instance, convinced the Chicago Transit Authority to refurbish, not demolish, the old elevated Green Line that runs through the city’s South Side and out into suburbs to the west. One result is heightened economic development around several transit stops. The Lake-Pulaski stop in the heart of Chicago’s rough South Side now boasts $16.5 million in new housing, $7.5 million in retail development, a new supermarket, and a planned bank branch.

“It wouldn’t have happened without the refurbished transit line and all the community action to make sure it wasn’t torn down,” said David Chandler, who manages economic development projects for the Chicago-based Center for Neighborhood Technology, a nonprofit research group. “Having a transit line is like having a third big street in front of your shop. Another 20,000 people a day come by with the capacity to stop.”

In 1994, Denver opened light rail service — electric streetcars — through Five Points, a low-income neighborhood. Marva Coleman, a local business promoter, anticipated that the new line would prompt new housing, commercial development, and better jobs. Seven years later, redevelopment projects valued at $50 million are either under way or planned in the community.

Across the nation, public investment in light rail lines is attracting significant private capital to the new transit corridors. A 1999 study by Cambridge Systematics, a transportation consulting firm, estimated that every $10 million of capital investment in public transit creates more than 300 jobs and a $30 million boost in local sales. In Michigan, a proposed commuter rail line between Lansing and Detroit is expected to generate 378 local jobs and boost area property values by $127 million within three to five years of the line’s possible 2005 debut.

Behind the Competition
Light rail in Michigan’s cities is years away. But regional bus systems are enjoying a small renaissance. Grand Rapids residents last year voted two to one in favor of a property tax increase to raise more than $7 million annually to expand the hours of operation and service area of the newly named regional bus transit agency, the Interurban Transit Partnership, or ITP. Some of west Michigan’s most prominent companies made substantial donations to the grassroots campaign to approve the tax increase.

“We are a changing city,” said Howard Sutton, vice president of corporate relations for Steelcase, Inc., the $3.4 billion-a-year manufacturer of office furniture. “As a company we are interested in regional planning and support a superb regional plan. A key component is transportation. We’re doing it because employers need to know their employees can get back and forth to work. We’re involved as a company because public transportation also relates to a more sophisticated city, a more mature city.”

David Sanders, vice president of the Metropolitan Affairs Coalition in Detroit, which has funded a rapid bus study, says it also makes a more competitive city. “Quality public transportation is an economic development issue,” he said. “We are competing with other metro areas for jobs, business, tourism and conventions, and simply as a good place to live, work, and raise a family. Our competitors — Chicago, Cleveland, Atlanta, Dallas — are way ahead of us in terms of public transportation.”

“The Detroit Regional Chamber and MAC are paying a lot of attention to public transportation, and that is moving the issue to the front burner,” said Mary Kramer, editor and associate publisher of Crain’s Detroit Business. “Business people are interested because it is a work force issue. I listen to employers in Macomb and Oakland counties. They have jobs available. They can’t link the jobs to the work pool. And if you’re from out of town and coming here to do business, it’s apparent that you can’t get downtown from the airport on a bus.”

“The opportunities for building coalitions around this issue are very strong,” added Ms. Kramer, who is co-chair of the Metropolitan Affairs Coalition task force studying rapid buses. “It’s one of those areas where strong business concerns can get together with sprawl and growth and environmental interests. If the political types had to ride the bus for a day, you’d see changes pretty damn quick.”

CONTACTS: David Sanders, Metropolitan Affairs Coalition, 313-961-2270, sanders@semcog.org; Mary Kramer, Crain’s Detroit Business, 313-446-0399, mkramer@crain.com; Howard Sutton, 616-247-2710, hsutton@steelcase.com; John Brown, Grand Rapids Regional Chamber of Commerce, 616-771-0300, brownj@grandrapids.org; David Chandler, Center for Neighborhood Technology, 773-921-6263 ext. 123, david@cnt.org; Marva Coleman, 303-832-3770.

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