New Orleans, Louisiana/Canal Streetcar Spine

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Canal Streetcar Spine

New Orleans, Louisiana

(November 1999)

(Canal Streetcar Map)


The Regional Transit Authority (RTA) is developing a 5.5-mile streetcar project in downtown New Orleans. The Canal Streetcar Spine would extend along the median of Canal Street from the Canal Ferry, at the Mississippi River in the Central Business District, through the Mid-City neighborhood to two outer termini at the Cemeteries and City Park/Beauregard Circle. The capital cost estimate submitted to FTA for evaluation is $139.4 million (escalated dollars), although costs are currently being refined by the RTA. Ridership is estimated to be 31,400 average weekday boardings and 5,300 daily new riders for the forecast year (2015).

Canal Streetcar Line Summary Description

Proposed Project Light Rail Streetcar
5.5 miles in length, 37 stations
Total Capital Cost ($YOE) $139.40 million
Section 5309 Share ($YOE) $111.50 million
Annual Operating Cost ($1998) $4.25 million
Ridership Forecast (2015) 31,400 average weekday boardings
5,300 daily new riders
FY 2001 Financial Rating: Low
FY 2001 Project Justification Rating: Medium
FY 2001 Overall Project Rating: Not Recommended

The overall project rating of Not Recommended is based on the lack of local funding to construct and operate the project at this time. The overall project rating applies to this Annual New Starts Report and reflects conditions as of November 1999. Project evaluation is an ongoing process. As new starts projects proceed through development, the estimates of costs, benefits, and impacts are refined. The FTA ratings and recommendations will be updated annually to reflect new information, changing conditions, and refined financing plans.


RTA completed a Major Investment Study/Alternatives Analysis of the Canal Street corridor in March 1995. The Regional Planning Commission, the Metropolitan Planning Organization for New Orleans, has included the Canal Streetcar Spine and the Carrolton Spur to City Park in the Transportation Plan and Transportation Improvement Program. The Federal Transit Administration (FTA) approved the initiation of preliminary engineering (PE) and the preparation of a Draft Environmental Impact Statement (DEIS) in September 1995. The DEIS was published in March 1997 and the Final Environmental Impact Statement (FEIS) was published in July 1997. FTA issued a Record of Decision for the project on August 28, 1997. The RTA initiated Final Design on the Canal Streetcar Spine in September 1997. Project start-up is anticipated in November 2002.

TEA-21 Section 3030(a)(51) authorizes the New Orleans Canal Streetcar project for final design and construction. Through FY 2000, Congress has appropriated $55.18 million in Section 5309 New Starts funds for this project.


The following criteria have been estimated in conformance with FTA’s Technical Guidance on Section 5309 New Starts Criteria unless otherwise indicated. N/A indicates that data are not available for a specific measure.

The project is rated as being in final design. The project will be re-evaluated for next year’s Annual Report on New Starts.


The Medium project justification rating reflects the project’s strong estimated cost effectiveness and positive land use rating, but relatively weak mobility improvements.

Mobility Improvements

Rating: Low-Medium

RTA estimates the project will serve 31,400 average weekday boardings and 5,300 daily new riders in 2015, with the following annual travel time savings.

Mobility Improvements New Start vs. No-Build New Start vs. TSM
Annual Travel Time Savings (Hours) 0.20 million hours 0.20 million hours

Based on 1990 Census data, there are an estimated 5,888 low-income households within a ½ mile radius of the line’s proposed stations, approximately 35 percent of the total households within a ½ radius of proposed stations.

Environmental Benefits

Rating: Medium

The New Orleans metropolitan area is an attainment area for carbon monoxide and ozone. RTA estimates the following annual emissions reductions.

Criteria Pollutant New Start vs. No-Build New Start vs. TSM
Carbon Monoxide (CO) decrease of 192 annual tons decrease of 154 annual tons
Nitrogen Oxide (NOx) decrease of 56 annual tons decrease of 52 annual tons
Volatile Organic Compounds (VOC) decrease of 26 annual tons decrease of 22 annual tons
Particulate Matter (PM10) decrease of 1 annual ton decrease of 1 annual ton
Carbon Dioxide (CO2) decrease of 1,749 annual tons decrease of 635 annual tons

RTA estimates that in 2015, the Canal Streetcar Spine project will result in the following savings in regional energy consumption (measured in British Thermal Units – BTU):

Annual Energy Savings New Start vs. No-Build New Start vs. TSM
BTU (millions) decrease of 20,595 million annual BTU decrease of 2,270 million annual BTU

Operating Efficiencies

Rating: High

RTA estimates the following systemwide operating cost per passenger mile in the year 2015.

Operating Efficiencies No-Build TSM New Start
System Operating Cost per Passenger Mile (2015) $0.76 $0.71 $0.59

Values reflect 2015 ridership forecast and 1997 dollars.

Cost Effectiveness

Rating: High

RTA estimates the following cost effectiveness indices:

Cost Effectiveness New Start vs. No-Build New Start vs. TSM
Incremental Cost per Incremental Passenger $4.40 $5.40

Values reflect 2015 ridership forecast and 1997 dollars.

Transit-Supportive Existing Land Use and Future Patterns

Rating: Medium

The Medium land use rating reflects progress made in the development of transit-supportive land use policies and plans along the corridor based on the adoption of the New Orleans Land Use Plan and the current effort to revise zoning regulations in accordance with the plan.

Existing Conditions: The proposed Canal Streetcar Spine is wholly located within an existing built-up urban area originally developed in the streetcar era. Much of the corridor lies within the CBD and historic areas, in which densities, mix, and pedestrian friendliness are generally good. CBD employment is 122,000, with a density of 153 workers per acre. Approximately 83,000 jobs are within ½ mile of the Canal Street Corridor in the CBD area, at a density of 40,000 jobs per square mile. An estimated 38,000 people live within ½ mile of the proposed line, at an average density of 6,800 persons per square mile. In the central third of the corridor, population density is approximately 10,600 persons per square mile. Residences are primarily single or two-family detached houses with long, narrow lots; there are some pockets of higher density residential use, including two- to three-story apartment buildings built as early urban renewal projects. The CBD includes a high-density mix of office, retail, hotels, and leisure attractions. Adjacent to the CBD are the riverfront and the French Quarter historic district which include tourist and leisure attractions. There are approximately 40,000 parking spaces in the CBD; cost for off-street parking ranges from $2.25 to $7.00 per day. Zoning ordinances establish parking caps for new development in the CBD that are considered quite restrictive. Outside the CBD, the corridor is a mix of neighborhood commercial development surrounded by dense residential neighborhoods. Beyond the CBD, trip generators include three colleges and universities, two city offices, and a hospital; City Park is a significant trip generator itself and includes the New Orleans Museum of Art as well as a variety of other recreational and leisure activities. The entire corridor contains sidewalks and pedestrian crossings. Streets are generally tree lined with on-street parking and small building setbacks. Outside the CBD, parking is available at no cost on the street or on small surface lots.

Future Plans and Policies: The recently adopted New Orleans Land Use Plan is a positive effort, and is expected to result in zoning revisions that are more conducive to preserving/enhancing the existing desirable elements of the corridor while better facilitating redevelopment of vacant or underutilized industrial and commercial sites. While the plan does not strongly focus on increasing development in the Canal Streetcar corridor, it does address the broader primary issues faced by the city including the need to stabilize population and spur re-investment and redevelopment. CBD employment growth is forecast in hotel, leisure and related service industries. The market is currently sustaining continued residential and hotel conversions in the CBD. Retail revitalization strategies have been incorporated in the Land Use Plan. The city’s design review authority for large projects and conditional-use projects is the most significant tool for ensuring that new development is transit-supportive; the city has already demonstrated its intent to use this authority accordingly. Much of the corridor is eligible for the city and state economic development program; incentives include tax exemptions or credits for construction, rehabilitation and job creation. The city is an applicant for an Empowerment Zone designation. The city planning process and its Land Use Plan have greatly improved public/neighborhood participation, with beneficial results.

Local Financial Commitment

Proposed Non-Section 5309 New Starts Share of Total Project Costs: 20%

The project’s financial plan proposes to utilize $111.5 million (80 percent of total project costs) in Section 5309 New Start funds, $15.0 million (11 percent) in State toll credits, and $12.9 million (9 percent) in local and other funds.

Stability and Reliability of Capital Financing Plan

Rating: Low

The Low capital finance plan rating reflects the concerns regarding RTA’s financial condition and its lack of demonstrated financial capacity to undertake the proposed project.

Agency Capital Financial Condition: RTA has experienced negative operating balances for three of the past four fiscal years according to audited financial statements; recent audits do not indicate substantial changes in RTA’s financial situation. These past trends raise concerns regarding RTA’s projection of an operating surplus from which to fulfill its capital match for major investments. Although the 20-year capital plan is balanced, it does not reflect stability and availability of state or local fund sources, nor does it define specific capital project needs over the period. Recent cost reduction strategies have resulted in cut backs to bus service, staffing, and administrative expenses. RTA is also pursuing development of the Desire Streetcar Project estimated at $70 million, to be developed in 2002 with completion scheduled in 2004; bus replacement is indicated in 2008, 2011 and 2015, consistent with the relatively young age of the bus fleet. The ongoing capital plan reflects heavy reliance on Federal funds to cover a high level of all capital needs.

Capital Cost Estimates and Contingencies: Over the past three years, the project cost estimate has gone from $136 million for evaluation for FY 1999, to $154 million in FY 2000, back to $139 million in FY 2001. RTA has indicated that refinements in final design accounts for this oscillation in costs. No information is provided to indicate how RTA will handle unexpected cost overruns.

Existing Funding: Only the City’s right-of-way donation represents committed funding. This $3.2 million contribution, 2 percent of total project costs and 11 percent of the local share, has been finalized with agreements between the City and RTA. RTA plans revenues of $8.7 million from its operating budget; however, the required operating surplus is tentative at present. These funds represent 6 percent of total project costs and 31 percent of the local share.

New Funding: The State’s toll credits program is currently being established in consultation with FTA; once approved, it is considered to be a reliable funding source, although its actual cash contributions are uncertain. A private contribution of materials valued at $1 million has not yet been secured.

Stability and Reliability of Operating Financing Plan

Rating: Low

The Low operating finance plan rating reflects the past trend of negative operating balances experienced by RTA, declining ridership in recent years, and questionable fare revenue expectations.

Agency Operating Financial Condition: RTA has experienced negative operating balances for three of the past four fiscal years accoridng to audited financial statements; recent audits do not indicate substantial changes in RTA’s financial situation. RTA’s ridership declines may present challenges to fare revenue projections, which are expected to increase at an average annual rate of 2.5 percent; RTA’s cash flow provides for fare increases every three years beginning in 2002. Retail sales tax sources are stable, and the projected growth rate is well within historical trends; applicability of a local hotel tax for transit is presently in dispute.

Operating Cost Estimates and Contingencies: RTA estimates an annual operating and maintenance budget of $4.25 million ($1998). RTA’s operating and maintenance costs are projected to increase at an average of 2.7 percent from 1999 through 2018. This is consistent with the 2.7 percent average annual rate of increase in operating expenses demonstrated from 1991 through 1996, which considers reductions in operating expenses of 7 percent in 1996. No information is provided for how RTA expects to handle potential future operating deficits.

Existing Funding: Retail sales tax revenues are stable with reasonable growth projections; these constitute approximately 50 percent of RTA operating funds. Operating balance trends present concern of RTA’s capacity to fulfill its operating needs.

New Funding: A one percent hotel tax may be an applicable funding source, pending resolution of litigation. No other new sources of funding are identified.

Locally Proposed Financing Plan

(Reported in $YOE)

Proposed Source of Funds Total Funding
Appropriations to Date
Section 5309 New Starts $111.50 $55.18 million appropriated through FY 2000
State Toll Credits $15.00


City of New Orleans (Right-of-Way) $3.20


Regional Transit Authority (RTA) Capital March $8.70


Materials Donations (Poles) $1.00


Total: $139.40

Note: Funding proposal reflects assumptions made by project sponsors, and are not DOT or FTA assumptions. Totals may not add due to rounding.

Canal Streetcar Spine Map of a 5.5-mile streetcar project in downtown New Orleans. The Canal Streetcar Spine would extend along the median of Canal Street from the Canal Ferry, at the Mississippi River in the Central Business District, through the Mid-City neighborhood to two outer termini at the Cemeteries and City Park/Beauregard Circle.