The Non-intuitive Math of the Lake Oswego Streetcar

This morning the Oregonian editorialized against further development of the Lake Oswego to Portland streetcar project, citing the cost. That’s the new cost estimate of $208M (not including the value of the right-of-way we already own), not the $400M+ estimate that came out of the last round of the NEPA process.

Without getting into an argument about whether the project is a good idea or not (we’ve done that before, multiple times), I do want to take a moment to explain the math that keeps local policymakers intrigued.

Let’s assume for the moment that both numbers above ($208M construction plus $80M right-of-way) are accurate.

That gives us a total project “cost” (by the Federal way of reckoning) of $288M. Assuming a successful New Starts application, the Feds cough up half, leaving the locals with a $144M tab.

But wait! We get to count the value of the right-of-way toward the match – so suddenly for $64M in local cash, we can potentially have a $288M transit line.

There are still a lot of hoops that this project has to jump through, but that value proposition will continue to compel local electeds to look for ways to get through those hoops.

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