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The deal-making behind the Silver Line

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In political transactions, players cannot make deals using dollars, but nonetheless they engage in trades to pursue their goals. Policymakers may engage in trades both with other policymakers and with Private Sector actors . While these deals are not denominated in dollars, their gains from trade can still be considered “profit” that goes to the parties to the trade. In the decision to create the DC Metro’s silver line extending from West Falls Church to Dulles International Airport, many public sector and private sector parties profited from the complex dealmaking that facilitated the extension.

The Silver Line was accompanied by redevelopment planning for Tysons Corner, a suburb of DC along the line’s route. These rail construction and accompanying rezoning benefitted three primary groups. The first and most obvious beneficiaries of the development of the Silver Line were the individuals and corporations that owned large parcels of land near the planned stations. The value of their holdings increased not only because of the new infrastructure, but also because the planning for the Silver Line involved significant upzoning, making more intensive and profitable use of their land legal. The combined promise of upzoning and the new metro stations ensured local policymakers that powerful landowners would support their efforts. These large landowners who benefited from upzoning include West Group, Tysons Corner Property, and West Mac Associates among other. The leadership members of these corporations were active in commenting on the proposed changes to the area’s land use and transportation plans. Because of its large investment in Tysons Corner and its corresponding importance in the development process, West Group has had special involvement in the redevelopment process. Implementing the proposed grid of streets relies heavily on West Group properties and other major developers cooperating to minimize the need to use eminent domain to achieve the infrastructure requirements to facilitate increased density and pedestrianism.

Secondly, for Fairfax County officials, the redevelopment of Tysons Corner created an opportunity for Planners to increase their stature and influence. The redevelopment plan — which incorporated Smart Growth objectives supported by the American Planning Association including walkability, mix-use development, and affordable housing — received the Daniel Burnham Award, gaining the planners involved national attention. Because the project involved working with influential individuals in the private sector and at the local, state, and federal levels, the process provided planners with many opportunities to improve their stature and to make connections to further their careers.

Lastly, the Washington Metropolitan Area Transit Authority benefitted both from increasing its domain and from improving the politics underlying its operating budget. While WMATA manages Metro’s operating budget, the $5.25 billion cost of construction of the Silver Line is being financed by MWAA (53%) and the federal government (18%) with the only the remaining 29% falling to the transit agency. However, each year, WMATA must scramble to cover its operating costs with a mix of subsidies and farebox recovery. This public sector budget calculation with no private sector equivalent has led to a situation in which WMATA was able to use other agencies’ money to make it easier to secure the yearly financing that it needs to operate by providing service to a larger pool of voters.

As in the private sector, deal making in the public sector is fraught with uncertainty. The opening of the Silver Line has resulted in decreased reliability for Metro’s entire system. In spite of adding stations to the system, total WMATA ridership is down. And while Fairfax County planners received accolades for their vision of a mixed-income community, even the area’s affordable housing is accessible only to relatively high-income households, and residential development is falling short of planners targets. Because Tysons Corner is located between Route 123, Route 7, and Highway 495, the addition of a Metro stop hasn’t turned it into the walkable neighborhood that planners said they envisioned.

From a benefit-cost perspective, the Silver Line project is a clear failure. At a per-kilometer cost of $182 million, the line is exorbitantly expensive for above-ground rail, and so far it’s failing to meet its expected ridership numbers. In spite of its financial failures, the project may be succeeding on the terms relevant to the parties who put the deal together. It has brought benefits to city planners, to WMATA leadership, and to Tysons landowners. While these benefits have come at large costs to Metro riders, taxpayers, and tollroad users who are paying for the Silver Line construction, these costs are largely borne by people who were not party to the dealmaking.



This post first appeared on Market Urbanism – Urbanism For Capitalists | Capitalism For Urbanists, please read the originial post: here

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The deal-making behind the Silver Line

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