Private Industry Could Help Pay For Public Transit

Middle Tennessee is putting together a long-term plan for regional mass transit, which could include an expanded bus and train network. As the plan takes shape, a looming question is who’s going to pay for it, and how.

Nashville Mayor Karl Dean has said local governments have to commit their own money before looking for state and federal funding. One other source might be using money from private industry, as other cities have done in several ways.

Michael Skipper is the director of the Metro Planning Organization. He says often when new businesses set up shop, they pay “impact fees,” to widen nearby roads or create intersections. But when they build on roads with no room to expand, Skipper says that money could go instead to nearby mass transit options.

“In the cases where widening isn’t an option, some places have moved to ask the developers, or require the developers to help offset the cost of adding new transit to that area, so that we’re still increasing the ability of our transportation system to move people.”

Skipper says in other cases, private parking lot companies have helped pitch in for nearby public transit, which provides customers who park their cars and board a train or bus.

Further, developers determined to have a rail or bus stop near their project may just pay for it themselves.

For example, in Denver, Colorado, developers are paying for a hub where bus and train lines converge, as part of a broader project that includes stores and housing.

“So as part of that development they’ll take on the burden of actually constructing the transit capital and those locations, as a way of speeding up the process.”

Skipper says that helps developers who don’t want to wait for local governments to work out payment for a transit station. Skipper says money tends to follow planned transit routes, the same way investments often cluster around busy intersections or big roads.

But Skipper also cautions Middle Tennessee still has to figure out what kind of system it wants to build – and how much it will cost – before it can zero in on the details of funding it.

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