Special Report: Light Rail

We Need Light Rail to Grow Our Tax Base, Reduce Our Infrastructure Liability

Please don't fool yourself into thinking Council can kill the goose and keep collecting the golden eggs.

By Ryan McGreal
Published April 18, 2017

With Council set to vote on the Environmental Assessment (EA) amendment for the city's Light Rail Transit (LRT) plan, there has been very little discussion about environmental issues and a lot of scary speculation about the future Operating Agreement, which Council will receive next year and have a chance to vote on.

Unfortunately, the report that's coming next year has overshadowed the report was presented to Council on March 28 and deferred until April 19.

Some Councillors are suddenly saying they can’t approve the EA Amendment because they don’t know what the Operating Agreement is going to say.

I’m pretty sure I can’t convince any Councillors that this vote on the EA amendment should just be about the EA amendment, and that Council will still have a chance to vote on the Operating Agreement when it comes forward next year.

But in the meantime, maybe we can turn the temperature down a bit.

The Operating Cost Scare Tactic

Council has already received an email from Hamilton LRT Director Paul Johnson with the operating cost context. Metrolinx is expected to cover the financing, lifecycle and insurance cost, since they will own the system, so we’d be looking at the operating and maintenance cost.

As Paul Johnson points out, Hamilton’s LRT is not like Toronto’s Eglinton Crosstown line, which has a long underground section and much higher operating costs.

Instead, we should look to the more comparable Waterloo Region ION LRT. The ION LRT is 19 km long and will cost $8.5 million a year in combined operating and maintenance cost.

Scaling from that, the 11 km Hamilton LRT from McMaster to Queenston Traffic Circle will cost around $4.9 million a year. And just for fun, the full 14 km LRT from McMaster to Eastgate will be around $6.3 million.

Is that a lot of money? Let’s find out.

According to the City's Public Works Department, the 2015 operating cost for the B-Line was $5.7 million. So our LRT cost will be around the same as what we’re currently paying for the express bus it will replace.

Hamilton B-Line Corridor 2015
Route Gross Cost Revenue Net Cost
01-King $9.7 million $5.6 million $4.1 million
05-Delaware $13.7 million $5.5 million $8.2 million
51-University $4.4 million $2.2 million $2.2 million
10-B-Line $5.7 million $2.1 million $3.6 million
Total $33.5 million $15.3 million $18.2 million

Here is a direct comparion between the Express Bus operating cost and the estimated LRT operating cost:

Cost Comparison: B-Line Express Bus vs. LRT
System Operating Cost
Express Bus $5.7 million
LRT to Queenston $4.9 million
LRT to Eastgate $6.3 million

And that’s without looking at potential savings on the other bus routes that are currently serving the LRT corridor, since some of those riders will shift to LRT - let alone the increase in operating revenue from ridership gains. And yes, there will be ridership gains with LRT.

So can we please put this operating cost scare tactic to bed? City staff and Metrolinx will negotiate an Operating Agreement next year once a winning bid has been selected in the RFP, and Council will have a chance to vote on the agreement at that time.

There is no credible, good-faith reason today for making the Operating Cost a reason not to approve the Environmental report.

Growing the Tax Base

Speaking of scary numbers, we need to talk about how much it will cost us to turn down the LRT - and I’m not even talking about paying back the $20-70 million that Metrolinx has already spent and committed on our behalf.

Kitty corner from City Hall is the small block bounded by Main, Bay, George and Caroline. Two properties on that small block have gone from paying $56,000 in municipal property tax to $900,000 after they were developed. That’s not even the entire block!

Homewood Suites and 150 Main West (RTH file photo)
Homewood Suites and 150 Main West (RTH file photo)

Here’s a map of the central downtown core, bounded by Queen, Cannon, Wellington and James, highlighting the many surface lots that are generating a pittance in property tax when they could be generating many tens of millions of dollars.

Hamilton downtown core with LRT and vacant properties highlighted
Hamilton downtown core with LRT and vacant properties highlighted

Don’t take it from me. The City’s Planning Department is already hearing from developers that LRT is a significant factor in new projects going ahead.

Or listen to the developers themselves, who are telling us loud and clear that LRT means more development. For example, this article:

The market being targeted by that building, he added, will appreciate the city's proposed light rail transit line.

"Shaw went after this location because he wanted something close to the new LRT line," Norton said. "At that location you couldn't get any closer if you tried."

And this article:

The prospect of the city's light rail transit line, among other changes here, drew him to Hamilton, Kemper says.

"Without the LRT, we wouldn't be building this building."

And this article:

The builder behind a 20-storey downtown student residence under construction is calling on council to commit to LRT or risk watching other developers "walk away."

Even the 2010 Canadian Urban Institute (CUI) uplift study, which used the most conservative numbers, concluded that we will get a lot more development with LRT than without it.

2010 CUI Uplift Study
2010 CUI Uplift Study

It’s not a coincidence that after years in which most development has been on suburban greenfields, we’re finally seeing a major resurgence in new development in the core and along the LRT corridor.

2016 Building Permit Activity by Dollar Value, with LRT Corridor Superimposed
2016 Building Permit Activity by Dollar Value, with LRT Corridor Superimposed

Please don’t fool yourselves into thinking you can sacrifice the goose and keep getting the golden eggs.

Infrastructure Liabilities

But LRT doesn’t just grow the city’s revenues, it also reduces the city’s growth in liabilities.

Waterloo Region made the hard decision to invest $253 million in local levy dollars in LRT because they calculated that it would cost a lot more not to do it.

Their choice was LRT and transit-oriented growth, or another 500 lane-km of roads to accommodate car-oriented growth. Or as they put it, another 25 Hespeler Roads. Here’s what Hespeler Road looks like.

Hespeler Road, Waterloo Region (Image Credit: Google Street View)
Hespeler Road, Waterloo Region (Image Credit: Google Street View)

We have a much easier choice: we can accept 100% full capital funding for LRT from the Province, or we can give up on our strategic growth strategy and try to fund the staggering cost in road expansion on our local tax levy.

Population, Area, Ridership, Hamilton and Waterloo
Hamilton Waterloo
* The Province increased Waterloo Region's 2031 population projection based in part on completion of the LRT system.
Population - 2011 520,000 507,096
Population - 2031 683,000 742,000 *
Area 1,117 1,369
Urban Area 231 202
Total Annual Ridership 21,000,000 22,000,000
Daily Ridership - LRT Corridor 20,000 20,000
Bus Fleet 221 251
Total Service Hours 650,000 640,000
LRT Capital Cost $811 million $818 million

Waterloo Region is actually an extremely good comparator for Hamilton in a whole variety of ways: size, population, area, urban area, distinct communities, transit service levels and ridership, you name it.

Waterloo Region committed to LRT even though they had to cover 30% of the capital cost. We’re getting 100 percent capital funding covered for us. Is this really a tough decision?

Ryan McGreal, the editor of Raise the Hammer, lives in Hamilton with his family and works as a programmer, writer and consultant. Ryan volunteers with Hamilton Light Rail, a citizen group dedicated to bringing light rail transit to Hamilton. Ryan writes a city affairs column in Hamilton Magazine, and several of his articles have been published in the Hamilton Spectator. He also maintains a personal website and has been known to post passing thoughts on Twitter @RyanMcGreal. Recently, he took the plunge and finally joined Facebook.

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By Deleted User (anonymous) | Posted April 18, 2017 at 18:30:25

"Waterloo Region is actually an extremely good comparator for Hamilton in a whole variety of ways: size, population, area, urban area, distinct communities, transit service levels and ridership, you name it."

Oh yeah; for sure. KW is Silicon Valley North and one of the top tech and start up cities in the *world*. Hamilton is a depressed steel town with 60,000 on social assistance. They're practically indistinguishable! Where is Google's new Canadian engineering HQ again? Was it Hamilton or KW? The cities are so similar I can never remember! Ryan, you're in an LRT fog. The people have spoken and they disapprove. At the very least we demand a referendum.

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By Tecumseh (registered) | Posted April 19, 2017 at 21:44:52 in reply to Comment 121270

We should probably just give our billion to KW then, so they can build phase 2 of their LRT. You can rest easy then JimC, knowing that the more deserving city built transit with your tax dollars.

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By JasonL (registered) | Posted April 19, 2017 at 21:03:01 in reply to Comment 121270

Google set up shop in the city just about to open a new LRT system.

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By Ryan (registered) - website | Posted April 19, 2017 at 13:52:04 in reply to Comment 121270

KW is Silicon Valley North and one of the top tech and start up cities in the world. Hamilton is a depressed steel town with 60,000 on social assistance

Scratch a committed LRT opponent and you usually find a thinly veiled Hamilton hater who holds the city in contempt.

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By HamiltonTransitHistory (registered) - website | Posted April 18, 2017 at 22:18:31 in reply to Comment 121270

"depressed steel town"

So it would be good for the city if a large construction project was built, right? Something that involved a lot of rebar, some structural steel, and some steel wheels running on steel rails?

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By ergopepsi (registered) | Posted April 18, 2017 at 20:02:44 in reply to Comment 121270

The people have spoken? 40-48 with 12 undecided. Really? You're going to cling to those numbers? You've been given ample referenced evidence that supports this project and yet you choose to ignore it over and over again. This isn't a debate club. You are free to change your position based on the facts.

I don't believe your stance on LRT is about LRT at all.

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By Dylan (registered) | Posted April 18, 2017 at 19:47:56 in reply to Comment 121270

You kind of lost me here. Are you saying KW ISN'T a good comparable municipality?

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By RobF (registered) | Posted April 18, 2017 at 19:34:38 in reply to Comment 121270

Hamilton is a depressed steel town with 60,000 on social assistance.

Are you now using the 60,000 people on social assistance to argue we don't deserve an LRT?

Or, that LRT would be bad for them?

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By JasonL (registered) | Posted April 18, 2017 at 18:38:44

let's also not forget that the 'express bus' only runs until 7pm and not at all on weekends. If we prorate the operating costs of the express bus with the same service hours as LRT it will cost more. For WAY lower, less capacity, less comfortable service. Not to mention all the development associated with LRT.

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By Haveacow (registered) | Posted April 19, 2017 at 00:07:59

Oh yeah; for sure. KW is Silicon Valley North and one of the top tech and start up cities in the world. Hamilton is a depressed steel town with 60,000 on social assistance. They're practically indistinguishable! Where is Google's new Canadian engineering HQ again? Was it Hamilton or KW?

With the exception of one hi-tech company (now for the most part defunct company) that had a fantastic product, Hamilton is only a few years behind Waterloo in the tech market. There is no reason McMaster University and its various medical research facilities and nucleonic engineering specialties can't help Hamilton become a leader in bio-tech and nano-tech.

Ottawa discovered you only need good biological and scientific/engineering tech for nano-technology to flourish. Ottawa doesn't have Nor-Tel anymore but it still has, AEC, General Dynamics, Bio Vail, Norton and many other small but influential firms, including many that specialize in optronics and optical switching. You just have to let the market grow. Hamilton has all the ingredients, LRT service would make it a lot easier to attract and retain talent as well as move people from place to place.

Wow Jim, do you actually want Hamilton to succeed at all? You certainly sound like you want Hamilton to fail, just to prove your anti-LRT stance was right. Who's side are you on? I bet you own stock in some Waterloo based companies!

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By john1242 (registered) | Posted April 20, 2017 at 06:48:23

Comparing LRT Capital Cost for Hamilton to Waterloo Hamilton $811M /11.9 km = $67.6 M Waterloo's $811M /19KM= $42.6 M Capital cost to build? Hamilton has $1 billion For 11.9 Km cost $84 m/km to Queenston Circle Hamilton's cost to Eastgate Square 14KM = $71.4 M Please explain the Capital Cost for Hamilton $84.0M for 11.9 Km and Waterloo's $42.6M for 19 KM ? Could you explain to Lachlan Holmes high school student with a handicap who spoke GIC meeting the benefits for him to move around Hamilton with support of LRT.from Mcmaster to Queenston Circle But has no support from Queenston Circle to Eastgate Square and Wards 5,9,10,11 who has handicaps challenges.Their only choice ride HSR bus for 5to10 years until funding is approved to Eastgate Square? Do the math funding is available $1 B Please don't tell me we have to start somewhere Start a Eastgate Square To McMaster for all citizens of Hamilton to use!!! I support LRT let's do it right.

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By Haveacow (registered) | Posted April 20, 2017 at 10:15:56

@John 1242 Waterloo has a big advantage in terms of construction costs because a significant percentage of their right of way was built on an existing railway right of way which is a big cost saver and they needed a lot less high cost infrastructure, like massive bridge structures.

Ottawa's 8km long O-Train Line using diesel multiple units (now the Trillium Line), cost only $21 million to construct between 1999-2001 because it used an existing single track railway right of way (with passing tracks at key stations), originally owned by the CPR. The extension of that line to Ottawa's Sir John A Macdonald International Airport (part of the $3.6 Billion Stage 2 Program), which has no pre existing railway right of way is going to cost over 150 Million for 2.2 km of track, signaling and 2 stations. That is without overhead catenary wire and electrical power systems.

Waterloo also doesn't have to build a massive bridge over a 400 series highway either, which will cost anywhere between $70-110 Million to build. The Ion LRT line had to move and rebuild a lot of underground infrastructure unfortunately, you guys have even more underground infrastructure to rebuild and move. Hence a lot of the higher costs.

Waterloo like Hamilton did have to build an expensive railway underpass as well but a lot of that cost was written off from the books because it can be leveraged as the city's portion of the planned GO/VIA Rail & ION interchange station development complex. Where Hamilton's is a free standing structure not part of integrated multi-modal development project.

However, remember they put in $250+ million of their own cash for the capital budget of their Ion LRT project, you guys are not putting any money into the capital budget of this project.

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By bobby2 (registered) | Posted April 20, 2017 at 13:47:14

Have to admit I'm not totally sure LRT System is a good fit for Hamilton or not? It well may be! I know Raise the Hammer is very pro-LRT & I respect that. I like to offer some opposite views as I believe huge issues always need to be questioned until a reasonable comfort level is achieved. In all honesty, City decisions cannot be approved or declined simply because it only benefits a certain geographic area of the City Ie Centre City Vs Suburb but if it really benefits the City as a whole. I have listened to all the Pros & the Cons from many sources, but what bothers me is, if the project goes South in 2022 or 2023 or 2024, most if not any of the Politicians will not be around & held accountable. Alternatively, it also applies to accolades if the system is a huge success.

 -LRT IS IT WHAT HAMILTON NEEDS OR WANTS OR CAN AFFORD?

Obviously the LRT issue in Hamilton is the top news story & subject to much concern by both Pro-LRT & Anti-LRT groups.

The wheels of the first LRT will not turn until 2024 provided everything goes well & on schedule.

   Sorry, history does count in decisions. Lessons learnt from the Stadium fiasco lead us to believe Hamilton is not the greatest overseer of projects. Another good example but on a lesser scale is Memorial Hall in downtown Waterdown. Oh well, what is a couple of years late amongst friends?:)

Oh yes, the word OVERSEE! 

Recent news of several Senior City Managers total failure to oversee the performance & cost of consultants have led to millions of dollars of tax dollar waste. The Auditor was totally amazed at the lack of oversight by Senior Managers. If you have confidence in the way City Departments & budgets are currently being run after reading the Performance Audit results, you really have to ask yourself why? Council needs to take some immediate action on Managerial Performance as indications lead to the possibility of huge waste of our property tax dollars.

Lets look at a few issues with LRT & you decide for yourself:

  • The current step we are at is for Council to decide to approve the EA (Environmental Assessment). Their decision is being delayed until next Wednesday.

  • The Pro-LRT Group emphasize that failure to approve LRT, the City is giving up a one time gift of $1Billion from the Province to cover Capital costs of the project. Few questions might be:       - How can it be described as a gift, as the Gov't doesn't have money, it's ours, the taxpayers money       - I'm over sixty-five & if I learnt anything over those years, very, very few things are free in life. Why is it Hamilton supposedly gets full Capital costs covered & other Ontario Cities don't/didn't but typically had/have to pay 1/3 of Capital costs? Can't be because Hamilton has so many Liberal MPP's as we have only one. I just find that a little suspicious? Probably, just me & my distrust of Politicians.

      - So, originally  the LRT plan called for a route from Eastgate Mall to McMaster University. Seemed to make sense if you are going to build this system. That got changed now from the nowhere destination of Queenston Circle to McMaster University. Who on earth thought that made sense?

      - What is the answer to the question of- We get half or three quarters through the project & discover to complete it will go millions & millions over budget. Remember, Hamilton & Liberal history on projects & overseeing costs:) What happens? Does project get downsized? Do Property taxpayers shell out the millions of overcost dollars? Just asking.

      - What will the Operation & Maintenance costs be to Property Tax Payers? The Pro-LRT say it will be less than the bus system? Remember the history of City Senior Manager's overseeing performance & costs? Judi Partridge would also like the answer to this question. By the way,       - What will be the cost to ride the LRT & how much will taxpayers have to subsidize the new system? The current HSR Bus Service charges:                  - McMaster Students- $151.00 ANNUALLY for unlimited rides-Really?                  - Presto Senior Annual Pass- $265.00                  - Normal Monthly Pass/Presto $101.20 or 12X= $1214.40 ANNUALLY Make your own judgements.

   -Did you know the current design provides for overhead wires connected to the LRT Train. Sounds like a glorified Street Car to me! Oh, should not of said that. Hmmm, last I heard , cost of Hydro in Ontario was a big issue? Ok,Ok, details, details.

    - Did you know the route time improvement of LRT vs Bus is 2 minutes. Hmm??? $1B to gain 2 minutes on a route? However, reliability is improved as LRT runs on dedicated rail lines so should stay on schedule stormy days etc..

   - What happens to the businesses along the route during several years of construction? The Pro-LRT say only two businesses closed during Waterloo LRT project. Will the same apply to Hamilton? I know, I'll simply avoid downtown entirely during construction because traffic will be a zoo. Yikes, kinda glad I don't own a business on the route.

  • The LRT System will have 14 stops with distance between stops of 600-800 metres. For the older generation that's 1200 to 2400 feet apart. Seems pretty far apart but Mayor Fred says walking is good exercise:)  Not sure, if you have two toddlers & six bags of groceries & your street is half way between stops & then another block or two down the street to get to your house.

  • I've read that several people ask why the $1B can't go towards a Rapid Bus System? Probably cost much less than $1B, don't have to tear up roads, Buses much easier to purchase, system can be put into place in half the time & routes can easily be changed due to changing demands & demographic- Did you know HSR Ridership declined by 435,000 trips in 2016? Yet, we want to build a $1B system to improve capacity before demand stats prove it's need? Oh ya, build it & they will come:)

  • Pro-LRT supporters say the future of Hamilton totally depends on building the LRT System. Without it, development will disappear, demand for homes & talent driven jobs will dissolve to zero. Hamilton will wither away. I agree, a fancy Transit System with shiny paint, bright lights will attract a certain faction of people but would they come anyway as downtown Hamilton much more affordable than GTA & believe it or not, there are a lot of nice areas in Hamilton. And, many, if not most, no where near the proposed LRT Route.

  • Park & Ride lots. Did you know, most Cities with LRT Systems have several Park & Ride lots along the route. Hamilton LRT System has planned ZERO LOTS! OMG!

   - Oh ya, what about Area Transit Rating System. Elimination will cost many several hundreds of dollars extra each year in Property Taxes over & above normal annual increases in most suburbs .

Sam Merulla Center City Councillor threaten last year to push for it's elimination if other Councillors didn't support LRT. He later dropped that threat.

However, it was quietly decided to leave the issue of elimination for the next elected Council in 2018.

Comment edited by bobby2 on 2017-04-20 13:49:48

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By Haveacow (registered) | Posted April 20, 2017 at 17:41:05

Ryan, here is a link to Ottawa's LRT Ready to Roll Program (Preparing for LRT Stage 1 in 2018) Use the graphics and information of you think its going to help your cause over the next week.

http://www.octranspo.com/ready4rail

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By Haveacow (registered) | Posted April 20, 2017 at 17:54:47

Here is the Stage 2 LRT Program Link and the Stage 2 LRT Update Technical Briefing Summary

http://www.stage2lrt.ca/

https://www.kanatanorthbia.ca/wp-content...

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