Streetcars Help to Drive Local Business Development

Downtown Tucson had until recently been a place searching in vain for a strong jolt of vitality — more commerce, street traffic and nightlife. But somehow the right catalyst was always lacking.

Now, it seems that this longed-for transformation has begun with a streetcar line called Sun Link. The sleek blue cars (there are eight in the fleet) have been gliding almost noiselessly along a 3.9-mile loop of track since last July, encouraging a shift hailed by public officials and business owners. College students and families alike have been drawn into the formerly sleepy downtown area, as lunch spots and bars have popped up along Tucson’s historic Congress Street. Just last week, Sun Link celebrated its millionth rider.

Among the major changes, either planned or in place, are several housing developments like the Cadence student housing complex, a Marriott hotel that broke ground this month and the first grocery store in the area in decades.

The streetcar, which costs $1.50 for a one-way ticket and $4 for a 24-hour pass, cuts through the University of Arizona campus and downtown, eventually crossing the I-10 freeway into the west side of the city.

For Ralph Avella, the manager of the Hub, a restaurant and creamery on Congress Street, the streetcar line has been good for business. The Hub recently opened a separate ice cream shop across the street, hoping to attract more customers from the growing number of visitors.

Mr. Avella said the streetcar showed that downtown Tucson was finally getting its act together.

“It’s almost more symbolic of ‘Hey, we’re actually doing that,’ ” he said. “We’re actually turning into a real downtown city.”

State Senator Steve Farley, a Tucson Democrat who had pushed for the streetcar for more than a decade, said even skeptics would realize that the project would pay economic dividends.

“The streetcar isn’t just about being a transportation mode,” he said. “It’s also an economic development tool that’s incredibly powerful when you do it right, and I think we, in Tucson, really did it right.”

As of this January, the private sector had invested $380 million in the downtown area, according to the Downtown Tucson Partnership. That doesn’t include millions of dollars more in projects on the drawing board, like the Marriott.

Scott Stiteler, the developer working with the Marriott, said that when construction started on the streetcar in 2012, Marriott and several other hotel chains made the unusual step of reaching out to him to express interest in building a hotel here.

“The hotel companies, before the streetcar, they did not have downtown Tucson on their radar screen,” Mr. Stiteler said. “Post streetcar, they started calling me saying, ‘Let’s get it together.’ ”

The revitalized downtown and west side might have happened without the streetcar, but it encouraged developers to invest at a much quicker pace, business owners said. Jerry Dixon, whose Gadsden Company owns several west side residential and commercial developments, said the streetcar was “the reason we made the investment.”

Voters in Pima County approved the streetcar in 2006 as part of a broader regional transportation plan. But construction on the $197 million project didn’t start until 2012, helped by $69 million in grants from the United States Department of Transportation.

The success of streetcars nationwide has been generally mixed, with some streetcars bringing more economic benefits than others, a Congressional Research Service report pointed out last year. A 2013 study, for example, found several cities were able to revamp their bus systems or establish bus rapid transit systems for less than $10 million per mile. Bus rapid transit systems often dedicate a street lane that only buses can use.

Tucson’s streetcar — with roughly $200 million paying for almost four miles — cost $50 million per mile.

But Arthur C. Nelson, a University of Arizona urban planning professor who researches transit systems’ impact on economic development, said Tucson’s streetcar was likely the best option for the city.

Sun Link, Mr. Nelson said, connects an unusual amount of “high-activity nodes in short distances,” from the medical center to the campus to downtown to the Fourth Avenue shopping district. As those spots are close together, a streetcar would probably be more effective than a bus rapid transit system, he said.

“I would say once the numbers are finally out in the way that I use them, we’ll find that the Tucson streetcar is probably among the nation’s most successful,” Mr. Nelson said.

But there are concerns and some drawbacks.

These charts show the trend in licenses, by category, issued to businesses within walking distance of the Sun Link streetcar line. Licensing trends within walking distance roughly reflected those of the rest of the city.Jonah Smith/NYT Institute

Steve Kozachik, a Tucson city councilman and a longtime skeptic of the streetcar, acknowledged that the streetcar had been a catalyst for development along its route, but he offered a “dose of reality,” saying the costs of operating and maintaining the streetcar in the future were unclear. He also said that the company that built Tucson’s streetcars, Oregon Iron Works, was no longer in the streetcar business and noted delays from the company in building the streetcars.

Mr. Kozachik said that he was concerned about the difficulty of maintaining the streetcar without a “consistent and reliable” manufacturer.

And while downtown business growth has led to increased property values along the route, those increased values have led landlords to raise rents, putting pressure on some business owners and even forcing some to leave.

Eleonora León, the owner of the clothing and accessory store La Fashionista, said her monthly rent increased by 64 percent. She said she was unsure whether she would be able to keep her shop.

“When you raise our rents, there’s nowhere for us to go but to close down,” Ms. León said.

Still, more and more people are stepping off the streetcar to explore the streets, perhaps stopping for a slice at Empire Pizza in downtown, said Ryan Gaines, the general manager there.

Mr. Gaines, 35, a University of Arizona graduate, said he rarely visited downtown when he was in college. He was living in Phoenix last year when he was offered the job at Empire Pizza, but he hesitated at first, thinking “there’s nothing going on” in downtown Tucson. His reaction changed when he returned to Tucson to meet with the restaurant’s owners.

“I spent a few days down here and saw the dramatic facelift that had happened,” Mr. Gaines said. “I changed my mind immediately.”