OLRT Economic Impact Study (Revised Final) 20110913

Revised Draft Final Report
Ottawa Light Rail Transit (LRT) Economic Impact Study

Revised Draft Final Report
prepared for:
City of Ottawa
prepared by:
CPCS Transcom Limited
CPCS Ref: 10277 August 25, 2011
OTTAWA LIGHT RAIL TRANSIT (LRT) ECONOMIC IMPACT STUDY REVISED DRAFT FINAL REPORT
Table of Contents
ACRONYMS / ABBREVIATIONS............................................................................................................................... ii EXECUTIVE SUMMARY ............................................................................................................................................ I 1 INTRODUCTION ............................................................................................................................................. 1 1.1 1.2 1.3 1.4 1.5 1.6 1.7 2 BACKGROUND ..................................................................................................................................................1 OBJECTIVES ......................................................................................................................................................1 PROJECT STRUCTURE .........................................................................................................................................1 PURPOSE OF THIS REPORT ...................................................................................................................................2 METHODOLOGY ................................................................................................................................................2 LIMITATIONS ....................................................................................................................................................3 ORGANIZATION OF THIS REPORT ..........................................................................................................................3
PRODUCTION IMPACTS ................................................................................................................................. 4 2.1 COMPARISON TO OTHER CITIES ...........................................................................................................................4
CONSUMER IMPACTS .................................................................................................................................... 7 3.1 3.2 3.3 3.4 3.5 3.6 TIME SAVINGS ..................................................................................................................................................7 USER COST SAVINGS ..........................................................................................................................................8 COMFORT ........................................................................................................................................................9 INCREASE IN PROPERTY VALUES .........................................................................................................................10 INCREASE IN RETAIL SPENDING...........................................................................................................................17 FISCAL IMPACTS ..............................................................................................................................................18
OTHER ECONOMIC IMPACTS ....................................................................................................................... 22 4.1 4.2 4.3 4.4 BUSINESS ATTRACTION.....................................................................................................................................22 TOURISM .......................................................................................................................................................23 ENVIRONMENTAL BENEFITS ...............................................................................................................................23 OTHER ECONOMIC IMPACTS..............................................................................................................................26
SUMMARY AND CONCLUSIONS ................................................................................................................... 27 5.1 5.2 5.3 PRODUCTION IMPACTS .....................................................................................................................................27 CONSUMER IMPACTS .......................................................................................................................................27 OTHER ECONOMIC IMPACTS..............................................................................................................................28
APPENDIX A: IDENTIFICATION OF COMPARABLE LRT PROJECTS .......................................................................... 30 APPENDIX B: COMPARABLE LRT SYSTEMS STATISTICS AND IMPACTS .................................................................. 36 APPENDIX C: COMMON ASSUMPTIONS FOR THE ECONOMIC IMPACT STUDY ..................................................... 52 APPENDIX D: STAKEHOLDERS CONSULTED .......................................................................................................... 55 APPENDIX E: REFERENCES .................................................................................................................................... 56
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Acronyms / Abbreviations
BCR BIA BRT BXD CAC CO CPCS DART DOTT DOTT Business Case FEIS FTA FTE GDP GHG IRR IO LRT MSA NET NET NOx NPV O&M OLRT PM PV RAV SOx TMP Updated Business Case URPD USD VKT VMT VOC Benefit Cost Ratio Business Improvement Area Bus Rapid Transit Luas Broombridge Line Criteria Air Contaminant Carbon Monoxide CPCS Transcom Limited Dallas Area Rapid Transit Downtown Ottawa Transit Tunnel DOTT Business Case (March 2010) Final Economic Impact Statement Federal Transit Administration Full Time Equivalent Gross Domestic Product Greenhouse Gas Internal Rate of Return Input-Output Light Rail Transit Metropolitan Statistical Area Nottingham Express Transit Nottingham Express Transit Nitrous Oxides Net Present Value Operations and Management Ottawa Light Rail Transit Particulate Matter Present Value Richmond/Airport-Vancouver Sulphur Oxides Transportation Master Plan OLRT Updated Business Case (June 2011) Urban Rail Projects Database US Dollar Vehicle Kilometres Travelled Vehicle Miles Travelled Volatile Organic Compounds
Executive Summary
The City of Ottawa is moving forward with plans to develop a 12.5 kilometre electrified light rail transit (LRT) system between Tunney's Pasture and Blair Stations. The new LRT will feature 13 stations, and a tunnel under the downtown area. Many of the benefits from this LRT system have been assessed in previous reports, albeit not comprehensively. This report draws on previous work and new data and analysis to provide a more complete picture of the anticipated economic impacts from the Ottawa LRT project (OLRT). Three broad categories of economic impacts were considered, each with various types of impacts, as demonstrated in the figure below.
Where possible, this report also compares the anticipated economic impacts of the Ottawa LRT project to those of 10 comparable LRT projects elsewhere, in Canada, the United States and Europe (where other projects were assessed as being reasonably comparable using specific screening criteria).
Production Impacts
As reported in the Downtown Ottawa Transit Tunnel (DOTT) Business Case (2010), capital investments from the Ottawa LRT project ($2.1 billion) are expected to generate economic impacts of $3.3 billion. The OLRT project is also expected to create over 20,000 person years of employment, as reported in that same study.
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When benchmarked against comparable LRT projects, expected job creation on a per capital dollar basis is high relative to the average, but within a comparable range.
Consumer Impacts
The consumer benefits of the OLRT are estimated to have a net present value of $3.1 billion, chiefly driven by cost and time savings to automobile users switching to the LRT.
Properties within 600 metres of OLRT stations are expected to experience an uplift in property value of $2.3 billion which, if captured, could generate $60.8M in new property tax revenue. The value of properties within 600 meters of stations are expected to increase by 18.2%.
The major consumer impact of the OLRT will be to provide easier access to downtown and across town for users who would otherwise take the BRT or drive through congested roadways. The OLRT also has a higher capacity than the existing BRT infrastructure, allowing for higher transit use.
Other Economic Impacts

Once complete, the LRT will boost both tourism and business attraction. Businesses deciding on office locations consider employee access to potential facilities as well as city infrastructure, both of which would be improved by the OLRT. For tourists, the LRT provides a user-friendly experience which allows easier navigation between tourist attractions and city hotspots, especially in poor weather and after dark.
Estimates of the OLRTs environmental benefit are dramatically greater than values of similar projects. The OLRT's rate of CO2 prevented per capital dollar is estimated to be 44.7 tonnes per dollar while the average of comparable systems is 8.1 tonnes per dollar.
Additionally, business attraction, city tourism, and health outcomes (thanks to urban pollutant emission reductions) will all benefit from the OLRT when compared to the existing system.
1 Introduction
1.1 Background
Ottawas Transportation Master Plan (TMP) expects transit ridership in the city to increase by 76%, from 44,500 to 78,300 person trips per day, between 2005 and 2031. To accommodate this increase in ridership, Ottawa is moving forward with plans to develop a 12.5 kilometre electrified LRT system between Tunney's Pasture and Blair Stations. The new LRT will feature 13 stations, and a tunnel under downtown. The new LRT is expected to alleviate congestion and related externalities, and result in substantial benefits for the City of Ottawa, including reduced travel times for passengers, increased mobility, more efficient transit operations, reduced air pollutants and greenhouse gas emissions, and increased land values adjacent to and near the new LRT. The LRT project will also have a number of direct impacts (job creation related to LRT development and operations), indirect impacts (suppliers, service providers and other ancillary job creation) and induced impacts (household expenditures from the income earned directly or indirectly through the LRT project and operations). Some of these expected costs and benefits of the Ottawa LRT have been assessed and reported in previous studies. The purpose of the present study is to consolidate and add to this previous work to provide a more comprehensive picture of expected economic impacts from the OLRT.
1.2 Objectives
The specific objectives of this study are three fold: 1. Consolidate and structure existing information on the economic impacts of the Ottawa LRT; 2. Identify and fill gaps in the economic analysis undertaken to date; and, 3. Benchmark anticipated economic impacts from the Ottawa LRT to similar projects elsewhere.
1.3 Project Structure

The project was developed in three broad phases, as set out in Figure 1-1. This report corresponds to the output of Phase 3.
Figure 1-1: Phased Approach to the Study
Inception Meeting and Initial Documentation Review Phase 1: Global Scan and Review of LRT Economic Impacts
Phase 2: Economic Impact Analysis of Ottawa LRT
Phase 3: Reporting
1.4 Purpose of this Report

The purpose of this report is to communicate the consolidated findings of Phases 1 and 2 of the study. Specifically, this report addresses the following specific questions: What are the range of economic impacts that are likely to result from the LRT? What is the value of these impacts (using appropriate metrics)? How do these potential impacts compare to other comparable LRT projects?
1.5 Methodology
Throughout this report, economic impacts are used as a general term to include all the effects considered, i.e. (1) economic impacts in the strict sense (direct, indirect, induced impacts, jobs, etc.), (2) effects that are normally referred to as economic benefits such as the value of time saved in switching to LRT, and (3) other effects such as business attraction, environmental benefits, etc. We have grouped these three types of impacts into three categories: production impacts, consumer impacts and other economic impacts as represented in Figure 1-2.
Figure 1-2: Types of Economic Impacts Considered and Related Methodologies
Lastly, in order to identify 10 LRT systems that are comparable to the OLRT, we developed and applied a four-step screening process which is described in detail in Appendix A. In order to provide the information for this screening process, extensive research was undertaken and a number of LRT operators were consulted. With the 10 comparator LRTs selected, we focused on identifying and analysing the available economic impact analysis that was conducted for each project and developing appropriate benchmarks.
1.6 Limitations
Readers of this working paper should note the following limitations: Third-party data and studies. In some cases we have relied on data provided by third parties or previous studies, including the DOTT Business Case (March 2010) and related update (June 2011). We do not warrant the accuracy of this data and information. Data limitations. While benefits cases, economic impact analyses, reports, academic articles and other available material on other LRT projects were used in compiling this paper, these often did not focus on the same impact analysis and frequently provided only qualitative data, making comparison by way of quantitative benchmarking difficult or impossible. Comparability of methodologies. Where quantitative data is available, the methodologies used in developing these data are often not entirely consistent. Where appropriate, we either provided comments to this effect, or processed the data to minimize inconsistencies. Comparability of LRT systems. The OLRT project is unusual in that it is a rail-based replacement of an existing bus rapid transit (BRT) service it will add capacity to an existing mass transit backbone. The downtown tunnel component also represents a significant cost component, not common in many other LRT projects. As such, the economic impacts from the OLRT project will likely be less than those of a comparable greenfield nature (i.e. where there was no previous mass transit solution such as BRT). Recent developments vis--vis the OLRT project. The Mayor of Ottawa recently announced changes to the Ottawa LRT alignment, specifically as related to the downtown tunnel. Not all resulting changes to the projects cost composition are reflected in this report as related detail was not available to the team at the time of writing. Real vs. planned LRT projects used in benchmarks. In many instances, benchmarks were developed using economic data for planned projects, as opposed to real projects that are constructed and operational. Actual impacts may be different than planned.
1.7 Organization of this Report

The remainder of this report is organized as follows. Chapter 2: Production Impacts Chapter 3: Consumer Impacts Chapter 4: Other Economic Impacts Chapter 5: Summary and Conclusions
2 Production Impacts
As reported in the Downtown Ottawa Transit Tunnel (DOTT) Business Case (2010), capital investments from the Ottawa LRT project ($2.1 billion) are expected to generate economic impacts of $3.3 billion. The DOTT Business Case, as described therein, used the standard input-output model approach to estimate the direct, indirect and imputed impacts associated with the construction of the LRT project. The overall impact is reported in the Business Case. The DOTT Business Case estimates that 20,724 person-years of employment will be created either directly, indirectly, or be induced by the OLRT construction and subsequent operation. These jobs will come from, primarily, the construction and operation of the LRT, but will also include jobs created as a result of easier transit into downtown and to offices clustered near the OLRT stations.
2.1 Comparison to Other Cities

For the purposes of providing meaningful comparison to the OLRT project, benchmarks were developed on the basis of impacts ($) per station and per kilometre, and jobs per million dollars spent, and other measures, as the case may be. It should be noted that there was a significant range in the costs of the various projects, as measured by project construction costs per station and kilometre, as shown in the figure below. This would suggest that the different projects, despite being similar in many respects, also varied in terms of capital cost based on individual factors that could not be captured in this overview. Such differences would naturally occur as a result of differing geological conditions and pre-existing urban layouts in the various cities. Additionally, Vancouver and Ottawa both include significant tunnel construction which is costlier than above-ground tracks.
Figure 2-1: Comparison of Capital Spending per Kilometre and Station

Dallas: DART Salt Lake City: Mid-Jordan Minneapolis: Central Corridor Nottingham: NET Phase 2 Toronto: Hurontario-Main
Dublin: Luas Broombrige
Hamilton: King-Main Toronto: Sheppard-Finch

Vancouver: SkyTrain Evergreen Line
Vancouver: SkyTrain Canada Line Ottawa: OLRT 50 100 150 200 250
Millions of Dollars Capital Spending per Line Kilometer and Station Dollars per Station Dollars per km
A number of benchmarks can be used to compare economic impacts across LRT projects. Figure 2-2 presents a comparison of person-years of employment created per million dollars of capital spending (construction cost).
Figure 2-2: Comparison of Construction Employment Impacts by LRT Project
Nottingham: NET Phase 2 Toronto: Sheppard-Finch Toronto: Hurontario-Main
Salt Lake City: Mid-Jordan Vancouver: SkyTrain Evergreen Line
Hamilton: King-Main Minneapolis: Central Corridor Ottawa: OLRT Vancouver: SkyTrain Canada Line Dallas: DART Dublin: Luas Broombrige 2 4 6 8 10 12
Person-Years of Employment per Million Dollar of Capital Spending
It would not be appropriate to benchmark and compare the total economic impact from the OLRT to that of other LRT projects as the economic impact numbers in the DOTT Business Case and more recent update do not provide sufficient information to assure a reasonable basis for comparison. We nevertheless present benchmarks from comparable LRT projects in terms of the economic impact (in terms of Gross Domestic Product (GDP)), resulting from project capital investments.
Figure 2-3: Comparison of Construction Economic Activity (GDP) Impacts by LRT Project
Vancouver: SkyTrain Canada Line
Vancouver: SkyTrain Evergreen Line Toronto: Hurontario-Main
Toronto: Sheppard-Finch Hamilton: King-Main

Minneapolis: Central Corridor Dallas: DART 0.2 0.4 0.6 0.8 1.0 1.2 GDP per Dollar of Capital Spending 1.4 1.6
3 Consumer Impacts
Primary user impacts (e.g. time savings, enhanced comfort), provide the primary source of data for this analysis. The data allow for a derivation of potential impacts on property values and increased retail spending. Finally, the impact on residential and commercial property values serve as the primary basis to assess the fiscal impact of the project for the City of Ottawa.
3.1 Time Savings

There are two dimensions to time savings: absolute time savings and reliability improvement. Absolute time savings reflect the incremental reduction in total (door-to-door) trip time resulting from LRT use over the Base Case (BRT). Reliability improvement time savings relate to the reduction in the variability of trip time that would result from replacing BRT with LRT. These savings can accrue to transit users as well as to road users, who benefit from reduced travel times owing to a reduction in congestion resulting from the LRT. An important factor in estimating time savings is whether time saved is accruing to business activities or activities of a personal nature (non-business). Generally business activities are accorded greater value in economic analysis, reflecting the broad generalization that timeliness is more important in business activities than in non-business activities. In order to validate the Transport Canada benchmark value of time ($13.24 in C$2010), future studies would require further estimates of business and non-business ridership in Ottawa. In the case of travel time savings, there are essentially three groups whose travel times will be affected by the introduction of LRT: those who currently use transit, those who currently drive but switch to transit, and those who continue to drive. The last group benefits by virtue of a reduction in travel times resulting from less congestion, since fewer cars and buses will be on the road relative to the Base Case. In order to calculate the present value of time savings, we require estimates for the number of people in each group in each year as well as the average travel time impact for each group.
3.1.1 Work to Date

The OLRT Updated Business Case described total time savings of 2.3 million hours for 76 million trips in 2031.1 The DOTT Business Case did not study the distribution of theses time savings across different transit user groups (business, non-business) and did not include an estimate of time saved by motorists or truck drivers. The DOTT Business Case and OLRT Updated Business Case assumes riders would shift from car to transit, and estimated the benefit to be the reduction in vehicle operating costs and lower
DOTT Business Case Update, p. 4.
accident rate. Together, these two metrics provided a net present value (NPV) benefit of $1.5 billion, or $254.0 million in 2031. The benefits to existing riders are estimated to have an NPV of $282.6 million. Further, individuals who continue to drive their cars are expected to experience a net benefit of reduced traffic of $206.4 million in 2031, with a $1.3 billion NPV. The OLRT Update Business Case did not quantify the benefits of improved reliability of the system resulting from the LRT but can expect that the LRT would yield a net improvement to reliability for riders carrying out their entire trip using the LRT.
3.1.2 Comparison to Other Cities

Quantitative measures for time saved were not readily undertaken in most cases, what data was available indicated $13 (Vancouver) to $14 (Toronto) per hour time saved. However, $22 per hour was used in the case of Salt Lake City, suggesting that there is potentially a high variability in time savings benefits depending on the methodology of measurement. The DOTT Business Case used the Transport Canada model to determine time saving values. Time savings for each year of operation are calculated as ridership multiplied by the average value of time per hour multiplied by average number of hours of travel per year saved relative to the Base Case. To the extent one of these three factors differs from LRT to LRT, the value of time savings will differ. The interesting benchmark in regard to time savings is the present value of time saved relative to the PV of all project costs. However, the data requirements for computing this benchmark are beyond the data that were accessible for this study. Thus, using the range from $13 to $22 per hour, a simple analysis projects a corresponding range of values of time saved by the OLRT between $29.9 million to $50.6 million in 20312. It is noteworthy that these estimates offer a range that is substantially higher than those of the Business Case which used the Transport Canada models $13.74 as the per hour figure and resulted in a $32.1 million per year saving. It is also worth noting that Ottawa is currently one of the wealthiest cities in Canada on a per capita basis. As such, the average value of an hour of commute saved by an Ottawan would be expected to generally exceed provincial and national averages. This per hour figure would also grow with labour productivity increases which in Canada have averaged 1.7% between 2001 and 20103. Assuming this productivity growth rate, the 2031 per hour figure would be $19.29 rather than $13.74. Lastly, qualitative data from the comparable projects suggested that LRT projects would consistently cut commute times considerably, for both those using transit and those in automobiles.
3.2 User Cost Savings

We consider two types of user cost savings: vehicle operating cost savings and the cost savings associated with accident avoidance. Both can be modelled such that they can be estimated
2 3
Using 2.6 million hours of transit time saved valued at $13 and $22 in 2031. Industry Canada, Labour Productivity Index: http://www.ic.gc.ca/eic/site/cis-sic.nsf/eng/h_00014.html
using the difference in vehicle kilometres travelled (VKT) resulting from the Base Case and the LRT Case.
3.2.1 Work to Date

The DOTT Business Case estimated the net present value (NPV) of vehicle operating cost savings to be $1.1 billion over the 30-year analysis period. Accident avoidance savings were estimated at $399.9 million NPV4. Operational cost reductions were estimated to have an NPV savings of $90.7 million stemming from annual savings of $5.7 million in 2019 and growing to $15.5 million as a result of the lower operational cost of the LRT versus otherwise necessary busses.

Overall, the comparable cases once again presented largely qualitative data which suggested a reduction in automobile operating costs and an improvement in safety. In addition, the displacement of parking facilities away from urban centres toward LRT system peripheries allowed for lower costs of land for such facilities and, consequently, lower parking prices.
3.3 Comfort
At least some of the value of improved comfort is captured in the estimates of increased ridership and associated time and cost savings discussed in Sections 3.1 and 3.2, above. Those who switch from BRT to LRT will presumably experience more comfort while those who switch from automobile to LRT will experience less comfort, but they will presumably save time and money. While comfort is mentioned as a benefit in the DOTT Business Case, it is not quantified.5 It should be noted that those who are required to switch modes when they did not have to do so in the past are likely to experience significant comfort penalties for doing so. For example, a commuter who used to board an express bus into downtown, but now has to take BRT to an LRT station and then switch would, despite potential time savings and the greater comfort of the LRT, likely experience comfort penalties over the duration of the trip due to the mode switch. This is compounded by Ottawas climate. However, current OC Transpo plans call for reductions in direct-to-downtown bus service and the adaptation of a hub-and-spoke system. As such, the reduction in comfort from switching vehicles is likely to occur regardless of the OLRT.

Comfort was not assessed quantitatively in any study that was examined. However, qualitatively it was noted that the value of comfort is reflected in the cost savings associated with people giving up driving private vehicles to ride the LRT. In addition, the certainty and reliability of LRT systems over bus systems was often cited as a benefit in providing users with a more relaxing and peaceful journey. This largely arises from the fewer stops associated with LRTs as well as
4 5
OLRT Cost and Benefits Analysis DOTT Business Case, p. 46.
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the fact that such stops are better marked, announced, and often provide easy access to alternate modes of transit.
3.4 Increase in Property Values

It is well known that a new public transit project can affect property values along the alignment. Values generally rise in proximity to stations, reflecting the improved, more accessible, character of the property. In Ottawa, however, the presence of an existing BRT system could somewhat reduce the incremental uplift resulting from LRT. LRT will also tend to extend the benefit area around stations, according to the Metrolinx study on property values, from 400m to 600m. However, while properties nearest to new stations experience the most uplift, those generally within easy walking distance (which tends to be a 10 to 15 minute walk, or about 1.2 kilometres) also experience increases in demand and, consequently, value. Industrial properties tend to benefit less, as accessibility is not generally as important a factor in determining property value. Further, industrial properties are not usually designed with pedestrian accessibility in mind and are thus less accessible, despite being near LRT stations, than adjacent non-industrial properties. Vacant land tends to experience greater uplift, reflecting the ease and lower cost of developing such property instead of redeveloping built-up properties.
3.4.1 Work to Date

In 2005, the City completed a study entitled Strategic Assessment: North-South Light Rail Value Uplift and Capture (Value-Uplift Study). This study examined development opportunities within a 400m radius around the (then) 15 stations proposed for the North-South LRT project. It estimated that the impact area would receive 5.3% of the citys annual 1 million square metres of new development, and that this share would increase by 20%, to around 6.4% with the presence of LRT. The estimated value of all properties in the impact area was $4.8 billion, with $1.7 billion in development likely in the Base Case (no LRT) and an additional $766 million likely with an LRT. These figures are all presented over a 15-year analysis period. The study also noted that the city could potentially capture between $80 million and $125 million of this development through a combination of property tax surcharges, development charge premia, and direct participation in the projects as a partner, where appropriate and feasible.
3.4.2 Approach
We propose an updated macro approach to complement the findings of the Value-Uplift Study This approach involves a fairly straightforward application of property value uplift to all properties with 600m of an LRT station. Using the latest City of Ottawa property assessment values and tax rates, as well as the composition of the areas surrounding the planned LRT stations, we can estimate the total likely property value growth and potential tax revenue creation resulting from LRT station development, based on the experience in comparable cities/projects.
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3.4.3 Area Assessment

An area of 12.7 million square metres falls within 600 metres of the planned OLRT stations and contains an estimated 14,727 separate properties. Figure 3-1 illustrates the distribution of properties, by type, around the stations. Notably, and predictably, commercial properties are largely concentrated in the downtown core with additions in Tunneys Pasture and around the St. Laurent shopping complex. Industrial properties are clustered chiefly around the Bayview, LeBreton, Train and Cyrville stations. Residential properties, for their part, are scattered throughout the area.
Figure 3-1: Land-Use Near Planned OLRT Stations
Currently, the land-use mix in the areas adjacent to the planned LRT route is dominated by Commercial properties (61% of the property values6), with Residential (31%), Industrial (1%), and Institutional7 (7%) properties making up the rest of the value. This breakdown, along with
6 7
Based on City of Ottawa property tax assessment value data. For the purpose of this analysis, Institutional properties are considered those used for public purposes (parks, Parliament, museums, community centres, public transportation facilities, sports complexes, schools, places of worship, etc).
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the data from Figure 3-2, shows that there is currently a heavy concentration of Commercial properties in Ottawas downtown, especially near to the planned Downtown East station. This suggests that there is a great deal of demand for Commercial in Ottawas downtown. By making travel between stations quick and effortless, the LRT would likely boost demand for Commercial space outside of downtown.
Figure 3-2: Assessed Property Values by Current Use and Closest Planned OLRT Station
Blair Cyrville St. Laurent

Train
Hurdman Lees Campus

Rideau
Downtown East Downtown West LeBreton

Bayview Tunney's Pasture 0 1 2 3 4
Billions of Dollars Commercial Industrial Institutional Residential
3.4.4 Uplift Estimates

Using the Metrolinx estimates of property uplift ranges in response to grade-separated LRT stations for low and high values blended with international benchmarks to provide a medium range estimate, and using Ottawas current Commercial/Residential/Industrial/Institutional mix, Figure 3-3 illustrates the most likely range of property uplift as a result of the OLRT project. While the existing BRT could potentially moderate uplift values, this is unlikely to play a major role both due to the limited uplift potential of BRT, in terms of percentage, and its more limited impact range of 400 metres from BRT terminals.
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Figure 3-3: Estimated OLRT Uplift Rates by Property Type Property Type Residential Commercial Industrial Low 15.0% 15.0% 1.0% Medium 19.6% 19.6% 1.5% High 30.0% 50.0% 2.0%
Given the above rates and Ottawas current geographic mix of properties, Figure 3-4 illustrates the likely boost that each OLRT stations surrounding area will experience8 in the Low, Medium, and High rate scenarios. The area that is likely to see the highest uplift is the Commercial-laden downtown core due to the high potential uplift rates seen on Commercial properties. This is mirrored in other areas which have large amounts of Commercial space present as a percentage of their current property value mix. Areas with little Commercial space, on the other hand, have a more moderate, though still substantial, uplift perspective.
Figure 3-4: Predicted Percentage Land Value Uplift by Nearest Planned OLRT Station
Hurdman Blair Cyrville St. Laurent Train Lees Campus Rideau Downtown East Downtown West LeBreton
Bayview
Tunney's Pasture 0% 10% 20% 30% 40% 50%
Anticipated Uplift
Blue bars represent Average Price Growth Scenario while e rror bars represent Low and High Price Growth Scenarios, respectively.
This analysis assumes no re-zoning or other significant change in current land-use patterns.
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On the low uplift side, the area around the Train station, given its current mix of Commercial and Industrial use leaves it with the lowest perspectives in the Medium growth scenario, but nonetheless gives it respectable potential in the High growth scenario. LeBreton and Bayview, meanwhile, with a predominantly Residential and Industrial makeup, have respectable Medium scenario uplift, but a lower High scenario potential (due to the lack of growth potential represented by Commercial properties). Lastly, Campus, which contains a large number of Institutional and Residential properties, is limited in growth potential as Institutional properties were not considered to have uplift potential for the purposes of this analysis9. The total anticipated uplift, by nearest OLRT station, is shown in Figure 3-5.
Figure 3-5: Predicted Total Land Value Uplift by Nearest Planned OLRT Station
Hurdman Blair Cyrville St. Laurent Train Lees Campus
Rideau
Downtown East Downtown West LeBreton Bayview Tunney's Pasture $0 $1,000 $2,000 $3,000 $4,000 $5,000 Millions Total Base Value Uplift in Medium Growth Scenario
Overall, as illustrated in Figure 3-6, the aggregate land value uplifts resulting from the OLRT are estimated to be 18.2%, using the medium scenario, corresponding to property value growth equivalent to $2.3 billion.
Institutional lands and properties would certainly experience land value uplift and could, potentially, provide income to their respective owners in future years through sale or lease.
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Figure 3-6: Total Estimated Land Value Uplift Resulting from the OLRT (Low, Medium, High Scenarios)
50% 40% 30% 20% 10% 0% Low Medium High 6 4 3 2 1 0
Billions of Dollars
These uplift estimates would suggest that Ottawas uplift, under the Medium growth scenario, would position it well within the ranges predicted and observed resulting from the comparable LRT projects analysed. Figure 3-8 illustrates Ottawas standing and suggests that the likely property value uplift would be higher than the average 18.2% anticipated in the Medium growth scenario.
3.4.5 Time Horizon

Overall, the time horizon of property uplift is expected to be as presented in for the four years surround project completion. That is, the two years prior to completion and two years following completion. This is a result of likely speculation as to pending property uplifts commencing well before project completion. Further, the uplift impacts are likely to occur both before and after the four-year horizon. For example, the Dallas DART was observed as having significant uplift impact, 12.6% for residential and 13.2% for commercial properties, well into 2001, over 5 years after its first line openings. However, such continued value uplift will undoubtedly be dependent on future transit expansion and improvements, both to the OLRT and BRT systems, and OLRT upkeep and quality maintenance.
3.4.6 New Developments

There are currently a number of undeveloped lands which will fall within close proximity to the OLRT stations. The lands around Bayview, LeBreton, Lees and Hurdman have land which could serve as greenfield projects for current or perspective owners, including the City. Lees station, for example, would provide access to land which the University of Ottawa has expressed interest in developing. Other stations, such as Train, Cyrville and Blair currently border shopping complexes which have large parking lots. These lands could serve as commercial or residential development or future parking facilities which could, in turn, spur other economic impacts. Additionally, while some of the vacant land which surrounds the OLRT stations is currently listed as contaminated and may not be suitable for development, investment in cleanup and decontamination could render these lands viable for potential development. However, given the lack of detailed environmental assessments, it would be premature to attempt to calculate potential values of such developments as substantial funds may need to be invested by current owners or the City itself to make the land viable for development or attractive for investment. Thus, while there is a high amount of potential for these lands, there is also a great degree of
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uncertainty as to their prospects and detailed Environmental Assessments, in some cases already under way, would need to be concluded to calculate potential value uplift at a later time. The redevelopment of some of these lands would also be eligible for funding under the Citys Brownfield Redevelopment Community Improvement Program.

The impact of LRT on property values is among the most commonly explored economic impacts. The Metrolinx summary table reproduced as Figure 3-7 provides a range of impacts that this study believes are reasonable for Ottawa as well. For a grade-separated LRT, such as the OLRT, Metrolinx has estimated that property within a radius of 600m around each station will be affected. The impact varies by type of property: Residential: 15-30% Retail: 10-50% Office: 15-50% Industrial: 1-2%
Figure 3-7: Metrolinx Summary of Property Uplift of Various Transit Systems
Technology Station Impact Area (m) Zoning Residential Low High Low Office High Low Retail High Low Industrial High
Bus 100 1% 2% 1% 2% 1% 2% 0% 1%
BRT 400 2% 4% 2% 4% 1% 2% 0% 2%
LRT: atgrade 500 10% 25% 10% 50% 10% 50% 1% 2%
LRT: grade separated 600
Subway 800 20% 50% 20% 50% 7% 15% 5% 5%
GO Rail 800 20% 50% 20% 50% 7% 15% 5% 5%
Premium % 15% 30% 15% 50% 10% 50% 1% 2%
Source: Metrolinx, Sheppard Finch Rapid Transit Benefits Case, June 2009.
These findings were supported by the findings of the analyses carried out on the DART LRT network. These found consistent residential, commercial and retail property value appreciation that was considerably above the metropolitan averages. Lastly, it was also observed that vacant land would experience greater appreciation than occupied land as its potential for development allowed it to be considered for flexible use rather than for existing uses. Lastly, the Ottawa Medium value growth scenario estimate of 18.2% places Ottawa squarely in the middle of the pack vis--vis comparable cities, as illustrated in Figure 3-8.
17
Figure 3-8: Property Value Uplift from Proximate LRT Stations

Vancouver: SkyTrain Evergreen Line Nottingham: NET Phase 2 Dublin: Luas Broombrige Ottawa: OLRT Minneapolis: Central Corridor Toronto: Sheppard-Finch Toronto: Hurontario-Main Hamilton: King-Main Dallas: DART 0% 5% 10% 15% Property Value Premium from LRT Station Proximity 20% 25%
3.5 Increase in Retail Spending

There are likely to be two impacts from the OLRT project on retail spending: a general increase in retail spending and a shift in the location of retail spending. Analysis in this section is primarily based on stakeholder consultation. Most stakeholders felt that LRT would be problematic, due to construction impacts, in the short term, but overall would be neutral or slightly positive for retail spending in the long term, once the system is fully operational.
3.5.1 Impact on the General Level of Retail Spending

The potential increases in retail spending emerge primarily from the cash that individuals save by using the LRT instead of a private vehicle for travel, the increased ease of access to shopping areas for those without vehicles, and more intrinsically inviting shopping areas for casual visitation. These savings were estimated in Section 3.2 in regard to vehicle operating cost savings, worth $1.1 billion in NPV terms over the 30-year analysis period. This represents a substantial saving which would, at least partially, be channelled into discretionary, and thus retail, spending.
3.5.2 Impact on the Location of Retail Spending

The other impact on retail spending relates to the location of retail spending. This impact will be different during construction and once the LRT is operational. 3.5.2.1 During Construction
The impact of LRT construction on retail is difficult to assess without more detailed construction plans and schedules, which are not available at this stage of the project. Stakeholders consulted
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indicated that road closures, particularly road closures that affect pedestrians, or restrict access to retail, will be detrimental. The Rideau Centre, in particular, expressed concerns about the changes in pedestrian traffic through their concourse as a result of potential changes in transit routes during construction. Almost every Business Improvement Area (BIA) consulted for this study indicated the importance of consultation in mitigating the potential negative impacts of construction on business and related economic activity. Currently, the City has requested that RIO to develop a communications plan, as part of the OLRT Transportation Demand Management Study, to mitigate disruption during the OLRTs construction. This will allow affected business and customers to have an awareness and understanding of the impacts of the project as well as the ability to raise their concerns with the City. 3.5.2.2 Once LRT is Operational
Once the LRT is operational, retail activity will likely tend to shift to locations made more accessible by the LRT and away from locations that have not seen improvements in accessibility. On balance, some shift will likely occur away from retailers in areas that will see lower traffic than in the Base Case such as retail stores at gas stations, which will lose traffic due to decreased car usage. Additionally, retailers located adjacent to LRT stations will likely face increased competition from retailers adjacent to other LRT stations due to the decrease in transit time between them. As well, local impacts such as a reduction in buses along Mackenzie King Avenue and a resulting drop in the number of people walking through the Rideau Centre to access Rideau Street and the By-Ward Market could change traffic patterns and cause certain retailers to suffer decreases in patronage. However, the negative impacts are likely to be relatively minor and will be unlikely to seriously negatively impact existing retailers. Primarily this results from the fact that, while there will be a shift in current retail shopping patterns, the overall increase in traffic around stations and around Ottawa in general will provide ample demand for existing retailers. Most of the BIAs consulted, such as the Preston Street and Wellington West BIAs, concurred with the idea that, long-term, they expect the OLRT to positively contribute to both their economic prosperity and accessibility.

Retail spending and foot traffic in areas surrounding newly constructed LRT stations was seen as receiving a significant boost, with estimates ranging between 20% and 30% (Luas Broombridge Environmental Impact Statement, p32). Further, it was qualitatively observed that ease of access greatly improved the likelihood of visitation of retailers by customers living outside the immediate vicinity and without access to automobiles. Additionally, it was noted that cost savings resulting from reduced automobile operating costs are likely to be redirected to other forms of consumption, including retail spending.
3.6 Fiscal Impacts

The fiscal impacts associated with the LRT refer to the impacts on the revenue and expenditures of the City of Ottawa.
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These fiscal impacts will be both direct, i.e. within the LRT system, and indirect, i.e. fiscal impacts not directly associated with the LRT system. Using input-output analysis the DOTT Business Case estimated that the construction of the OLRT would generate an estimated $148.8 million in taxes, although no breakdown was provided between federal, provincial and municipal taxes.
3.6.1 Direct Fiscal Impacts

Direct fiscal impacts of the LRT system will result from the net subsidy provided to the LRT or the revenue generated from the LRT system. This impact will depend most importantly on the structure of the procurement of the LRT, as many different structures are possible. Until such time as the procurement process has been completed, it will not be possible to assess the direct fiscal impact of LRT. On an ongoing basis, the operating costs of the LRT are forecast by the City to be more than offset by cost savings achieved by reducing otherwise necessary bus service. These are estimated to be $5.7 million in 2019 and grow to $15.5 million by 2040. Thus, the LRT will service its corridor in a more cost-effective manner than would the buses needed to match the same level of service. This would free up City resources to reduce the number of buses purchased and operated or to provide better transit services to regions outside the LRT catchment area.
3.6.2 Indirect Fiscal Impacts

Outside of funding from the federal and provincial governments the majority of the Citys revenue comes from property taxes and payments in lieu of taxes as per Figure 3-9.
Figure 3-9: Revenues of the City of Ottawa by Source, 2011 Budget
Fees & Service Charges 17% Own Funds 1%
Fines Other 1% 1%
Federal 2%
$2.3 Billion in revenue for 2011
Property Taxes 53%
Provincial 17% Investment Income Payments in 1% Lieu of Taxes 7%
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3.6.2.1
Property Tax Revenue
Indirect fiscal impacts include the potential for increased property tax revenue resulting from higher property values around LRT stations. This increase could be offset by any property tax revenue that is lost due to properties that cease generating property tax or pay less property tax as a result of LRT, e.g. properties that are expropriated or suffer a reduction in value. However, according to the City, the particularities of the OLRT are such that properties which will be expropriated for the project are unlikely to impact property tax revenues as they are mostly partial takings or will allow for an amicable relocation of the businesses concerned. Potentially, the City could capitalize on the increases in property values in the OLRT corridor by maintaining property taxes at their current levels, thus benefiting from additional revenue without increasing taxes. In total, existing properties in the LRT corridor can be expected to increase in value by a total of $1.8 billion, in the Low, $2.3 billion in the Medium, and $5.1 billion in the High growth scenarios as shown in Figure 3-10. At current property tax rates, these value increases would boost property tax revenue by an estimated $46.5 million, $60.8 million, and $145.3 million in the Low, Medium, and High growth scenarios, respectively10. If captured, these increases would represent property tax revenue increases of 14.6%, 19.1%, or 45.6%, compared to the current OLRT-area tax revenue, or an overall increase in city-wide property tax revenue of 3.8%, 4.9%, or 11.8%, depending on the scenario assumed. The High growth scenario estimates are particularly high given the potential high growth in Commercial values coupled with their 3.3% estimated property tax rate (versus 1.2% for Residential). However, these gains will not necessarily be realized immediately upon project commencement or completion, but will only incrementally increase as property values rise over time as discussed in section 3.4.5.
Figure 3-10: Total Value of Properties in OLRT Corridor
Base
Scenario
Low
Medium High
5 10 Billions of Dollars Institutional Industrial Commercial Residential 15 20
Given that property values near the LRT will grow disproportionately to those in the rest of the city, the amount of property tax income from these properties will also grow faster than
10
Property tax rates estimated based on Commercial, Residential, and Industrial properties worth $1,000,000.
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elsewhere. This means that owners of property within the areas uplifted by the proximate OLRT stations will pay more in property taxes than they would otherwise have in the absence of the stations and more than similar properties further away. This phenomenon will result in de-facto tax increases directly attributable to the presence of the OLRT. In turn, this will give owners in the rest of the city a break on their tax assessments as they will drop in order to keep City revenue unchanged11. Introducing specific surcharges on current property owners would, in effect, result in double taxation. Yet, the total amount of tax revenue taken in is not automatic and is dependent on the decisions of Ottawa City Council which determines revenue targets and tax rates. As noted, at current rates, property tax revenues would increase, but conceivably, Council could instead decide to keep revenue constant and lower city-wide tax rates. This would be feasible as the now higher-value properties around the OLRT could pay higher net taxes, despite overall lower rates and, in effect, subsidize lower property taxes for non-OLRT adjacent properties.

The fiscal impacts of LRT can be estimated by use of an input-output model, as is the case with the planned Vancouver Evergreen Line. In that case a construction cost of $1.4 billion (C$2010) would result in provincial and federal tax revenue of $75 million each, and municipal tax revenue of $6.2 million, for a total of $156.2 million compared to Ottawas anticipated $127 million. However, overall, these impacts tended to vary significantly between jurisdictions and depend heavily on estimated increases in property and personal taxes, local retail spending, amount of land purchasing required for LRT construction, and ongoing LRT operational costs and revenues. Thus, direct comparisons, aside from the example above, are not likely to provide any degree of insight as to the final effects of the OLRT.
11
A requirement of current Ontario property tax laws.
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4 Other Economic Impacts

Other economic impacts, which include a wide-ranging set of potential impacts such as business attraction, tourism and environmental benefits, will also likely bring an overall positive impact to Ottawa as a result of the OLRT.
4.1 Business Attraction

In terms of business attraction, a number of stakeholders consulted felt that the absence of a rapid transit system, beyond the existing BRT system, negatively affects the perception of Ottawa. One stakeholder described the effect as diminishing the perception of Ottawas sophistication and thus reducing its stature as a truly global city. This stakeholder also noted that business people visiting Ottawa, including for conventions, are much less able to visit and experience the city owing to the absence of a simple-to-navigate LRT, or equivalent, system. Beyond optics and branding, stakeholders pointed out that the LRT will make Ottawa more attractive to business simply by reducing car traffic, especially in the downtown core. By reducing car and bus traffic, the LRT would allow for a more liveable city which would enhance Ottawas liveability indices and make it a more attractive city for both workers and employers. This liveability and higher profile would, in turn, bring more pedestrian traffic on the streets of downtown which would result in more customers for street-side retailers. Many stakeholders, such as the Wellington West and Preston Street BIAs are quite hopeful and optimistic that the OLRT will bring new business and traffic to their members. However, most established stakeholders in downtown, such as the Rideau Centre, Bank Street BIA, and Sparks Street BIA, do not think that the LRT will have a major impact in their operations or on their markets competitive mixes, in the long run. Overall, these stakeholders are more wary of construction period disruptions than of post-LRT opening traffic pattern shifts or new retailer attraction. Given the long-term time horizon of the LRT project and the uncertainty regarding its final implementation, most stakeholders have not yet undertaken rigorous assessments of the impact the new stations and reduced bus traffic will have on their business corridors. It is important to keep in mind, however, that the OLRT is only one component of a larger Transit Plan with numerous phases, service changes, and infrastructure improvements. As such, stakeholder concerns and long-term transit potential will be supported in later phases which will deal more directly with the infrastructure and transit system outside the immediate vicinity of the OLRT line.

The business attraction potential of LRT was not separately quantified in any economic impact assessment that was reviewed. A number of studies discussed the business attraction potential of LRT in qualitative terms, notably the Metrolinx benefits cases highlighted the business attraction potential of time savings for businesses. Further, the ability of LRT stations to draw development and redevelopment was mentioned repeatedly.
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4.2 Tourism
Many of the positive impacts that tourist would experience have already been captured in terms of time saved, vehicular operating cost and accidents avoided. Many stakeholders also feel that LRT will open up new areas of the city of visitors, especially in the winter, when travelling outside can be a significant deterrent to exploring. Beyond the obvious ability to travel more quickly and comfortably from one part of the city to another, such impacts will be dependent to some degree on the extent of underground or connected interior development around stations. Further, the non-traditional tourist destinations such as Wellington/Scott streets and St. Laurent Shopping Centre would become open to visitors unfamiliar with Ottawas transportation network. Another important aspect of leveraging the potential tourism benefits of LRT that was raised by stakeholders is the importance of good way-finding (i.e. the signage inside and outside the LRT system, and indeed throughout the city) to aid visitors in navigating to points of interest. For example, giving tourists a clear indication that the Canadian War Museum and ongoing public events, such as Bluesfest at LeBreton Flats, are efficiently accessible via the LRT would boost tourist drop-in visits to these venues.

Tourism potential is another benefit LRT that was not quantified separately in any economic impact assessment that was reviewed. However, several of the cases did note that the LRT project would boost the ease with which tourists would navigate the city and potentially increase their mobility and spending.
4.3 Environmental Benefits

Environmental benefits are generally analysed in terms of reductions in greenhouse gas (GHG) emissions and criteria air contaminant (CAC) emissions. The CAC emissions included in the estimate are carbon monoxide (CO), volatile organic compounds (VOC), nitrous oxides (NOx), sulphur oxides (SOx), and particulate matter (PM). GHG and CAC emissions come from vehicles. In the case of replacing Ottawas BRT system with an LRT system, GHG and CAC emission reductions will come both from the reduction in bus-km travelled (as buses are replaced by LRT vehicles), and from reduced car-km travelled resulting from a modal shift from car to LRT. It is also important to note that LRT vehicles cannot completely eliminate GHG and CAC emissions, as long as the electricity used to power the LRT is generated using technology that emits GHGs and CACs.
4.3.1 Reduction in Greenhouse Gas Emissions

The value per tonne of GHGs (CO2 equivalent) abated was $37 in 2007 dollars. Although it is unclear in which years dollars this figure is presented, the DOTT Business Case does note that this figure was updated using the standard inflation rate of 1.5%. Thus, value of $44 per tonne was used for 2031.
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The DOTT Business Case estimated the value of reduced GHG and CAC emissions resulting from the replacement of the current BRT system with an LRT12. Overall, the updated Business Case estimates that, in 2031, the LRT will reduce the GHGs emitted in Ottawa by 93,908 tonnes at $44 per tonne, for a total monetary saving of $4.1 million. The NPV of these savings is estimated at $24.5 million.
4.3.2 Reduction in Criteria Air Contaminants

The DOTT Business Case Update estimated that 4,592 tonnes of Criteria Air Contaminants (CAC) would be eliminated in 2031. The associated NPV over the 30-year period is $11.9 million. Additionally, as the reduced traffic effects will disproportionally favour the urban core, with a large concentration of day-time workers, the elimination of CAC emissions from downtown Ottawa will likely have direct health benefits to those working and living in downtown. As CAC emissions are toxic to human health, their reduction, due to reduced car and bus traffic, will improve Ottawa health outcomes and save lives13. Such health benefits are particularly acute in urban areas where CAC emissions are trapped by tall buildings and breathed by pedestrians, residents, and office workers alike. Given Transport Canadas estimated economic value of $4.25 to $7.514 per life, reduced mortality would considerably improve the health benefits of the OLRT.

Environmental benefits were usually quantified, but at varying levels of detail and comprehensiveness in the various reports published regarding the comparable projects analysed. However, most studies assessed qualitatively suggested that LRT construction provides tangible improvements to air quality and allows for new green space to be developed in lieu of highway interchanges. The Metrolinx Benefits Cases only quantify the benefit of reduced CO2 emissions, and ignore benefits arising from reduction in other air pollutants such as sulphur dioxide and carbon monoxide. The Metrolinx Benefits Cases value foregone CO2 emissions at $0.01 per vehicle-km eliminated. This valuation is consistent with a valuation of CO2 at $40/tonne. However, the Business Case estimates, both in terms of volume and value, are outliers when compared with similar LRT projects in Canada and around the world. As Figure 4-1 illustrates, the OLRT is estimated to reduce total annual GHGs eight times more than the average reduction of comparable LRT projects. Further, while other projects reduced GHGs by an average of 8.1 tonnes per capital dollar spent, the OLRT is proposing to reduce GHGs by 44.7 tonnes per dollar. The reasons for this are not clear.
12 13
DOTT Business Case, pp. 49-50. Levy et al. (2011) The Public Health Costs of Traffic Congestion: A Health Risk Assessment. Harvard Center for Risk Analysis, available at: http://www.ehjournal.net/content/9/1/65 14 Zhang et al. (2010) Towards Estimating the Social and Environmental Costs of Transportation in Canada. Transport Canada, available at: http://www.tc.gc.ca/eng/policy/report-aca-fullcostinvestigationtransmodal-tp14487-tp14487-1547.htm
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Figure 4-1: Tonnes of CO2 Prevented per Year per Dollar of Capital Spending
Total Tonnes of CO2 Prevented 0 Hamilton: King-Main
Nottingham: NET Phase 2
20,000
40,000
60,000
80,000
100,000
Minneapolis: Central Corridor Dublin: Luas Broombrige Toronto: Sheppard-Finch

Toronto: Hurontario-Main Salt Lake City: Mid-Jordan

Ottawa: OLRT 0 5 10 15 20 25 30 35 40 45 50
Tonnes of CO2 Prevented per Capital Dollar Tonnes of CO2 Prevented per Capital Dollar Total Tonnes of CO2 Prevented
This is also the case when analysed from a per daily rider perspective as shown in Figure 4-2. The OLRT is anticipated to reduce GHG emissions by 0.45 tonnes per daily rider versus the average of all comparable projects of 0.20 tonnes.
Figure 4-2: Tonnes of CO2 Prevented per Year per Daily Rider
Hamilton: King-Main Minneapolis: Central Corridor Nottingham: NET Phase 2
Vancouver: SkyTrain Canada Line Toronto: Hurontario-Main

Vancouver: SkyTrain Evergreen Line Salt Lake City: Mid-Jordan Toronto: Sheppard-Finch Ottawa
0.10
0.20
0.30
0.40
0.50
GHG Reduction per Daily Rider (Tonnes)
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Figure 4-3 illustrates how, as per the Business Case and the Updated Business Case, the OLRT is forecast to carry 99 riders per dollar of capital spending which is substantially better than the comparable projects which had an average of 46 riders per capital dollars.
Figure 4-3: Number of Daily Riders on the OLRT per Dollar of Capital Spending
Toronto: Sheppard-Finch Salt Lake City: Mid-Jordan Nottingham: NET Phase 2
Minneapolis: Central Corridor Vancouver: SkyTrain Evergreen Line

Toronto: Hurontario-Main Vancouver: SkyTrain Canada Line Hamilton: King-Main Ottawa: OLRT 20 40 60 80 100
Daily Ridership per Dollar of Capital Spending
Furthermore, the current OLRT plan does not anticipate the construction of dedicated park-andride facilities in outlying LRT stations such as Tunneys Pasture or Cyrville. The current plan calls for users to bus into these outlying stations and then transfer onto the LRT for the remainder of their journey. For many transit users, this will introduce an additional mode switch which is unlikely to create positive incentives to switch from cars to a bus/LRT mix.
4.4 Other Economic Impacts

The impacts of noise, vibration and electromagnetic radiation can have economic consequences. As noted previously, such consequences are rarely quantified in monetary terms. The University of Ottawa, in close proximity to whose property and facilities the LRT will operate, noted that these impacts were of interest. Further analysis, as part of an environmental assessment, would be required to evaluate the magnitude of these impacts and the cost of mitigation. It is also likely that there will be significant improvements in air quality downtown as a result of the reduction in bus traffic through downtown Ottawa. As already noted in the previous section, air quality improvements in downtown will provide health benefits to a large number of individuals and therefore likely reduce both private and public healthcare costs.
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5 Summary and Conclusions

5.1 Production Impacts
As reported in the Downtown Ottawa Transit Tunnel (DOTT) Business Case (2010), capital investments from the Ottawa LRT project ($2.1 billion) are expected to generate economic impacts of $3.3 billion. In addition, the DOTT Business Case estimates that 20,724 person-years of employment will be created either directly, indirectly, or be induced by the OLRT construction and subsequent operation. These jobs will come from, primarily, the construction and operation of the LRT, but will also include jobs created as a result of easier transit into downtown and to offices clustered near the OLRT stations.
5.2 Consumer Impacts

Together, the Consumer and Other economic impacts were estimated, by the DOTT Business Case and its Update, to generate a benefit of $3.1 billion, as summarized in Figure 5-1.
Figure 5-1: Benefits of the OLRT
Operating Cost Savings $90.7 M
Value of Travel Time Saving (Auto Users) $1,227.1 M
Vehicle Operating Cost $1,107.0 M
Accident Avoidance $399.8 M
Environmental Benefits $36.4 M
Value of Travel Time Saving (Existing Riders) $282.6 M $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 Millions
$0
$500
5.2.1 Time and Cost Savings

In terms of consumer impact, the OLRT will provide easier access to downtown and across town for users who would otherwise take the BRT or drive through congested roadways to reach their destinations. Further, the OLRT will provide for a higher capacity transit system than is possible with the limitations of current roadway infrastructure and the existing BRT system. This transit improvement will both allow for users to save time and for a reduction in expenses incurred, both for individuals and for the overall economy, in automobile upkeep and road accidents. Time and cost savings associated with automobile usage reduction as a result of the OLRT are the key driving force of the benefits illustrated in Figure 5-1, and comprise 87.0% of the anticipated benefits of the OLRT, as expressed in the DOTT Business Case and related update.
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5.2.2 Property Values

The OLRT will also bring a significant increase in property values around the planned stations. As corroborated by benchmarks from other cities, property values in the 600 metres surrounding the stations will increase significantly. While industrial properties are not likely to enjoy a large uplift, commercial and residential properties will. Overall, the property values surrounding the stations, currently valued at $12.8 billion as per Figure 5-2, will likely experience uplift of at least 13.9% and potentially up to 41.2%. Further, this value increase will likely not be contained to the 600 metre area analysed in the study, but will boost values throughout the city.
Figure 5-2: Total Value of Properties within 600m of OLRT Stations
Institutional 7% Industrial 1% Residential 31%
Current property value of $12.8 billion within 600m of OLRT stations
Commercial 61%
This value increase will also allow for a robust growth in City property tax collection which could provide a re-occurring source of revenue for future transit improvements or allow the City to pay off any debts incurred as a result of the OLRT construction.
5.3 Other Economic Impacts

While it is certain the OLRT will have other positive economic impacts, their values are much harder to both qualify and forecast. However, a developed LRT will certainly act as a bonus in terms of tourism and business attraction. For tourists, the LRT provides a more user-friendly experience which allows them to more easily navigate between popular destinations. In terms of business attraction, an LRT provides more location options without compromising access and offers potential employees more flexible transit alternatives. Lastly, the OLRT will provide tangible economic benefits in terms of environmental offsets. While the LRT itself will be powered by electricity generated by non-renewable sources, given Ontarios current energy mix, its overall carbon footprint will be much less than the alternative BRT/car mix. Further, as LRTs do not have combustion engines, the emission associated with
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them are located away from dense urban areas and thus provide direct health benefits by reducing particulate matter and CACs from peoples workplace environments. The net environmental effects of the LRT and their consequent economic costs and benefits to health and the environment, however, are multivariable and would require a more substantial and scientific Environmental Impact Assessment to fully calculate and understand.
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Appendix A: Identification of Comparable LRT Projects

Relevant Comparators to Ottawas LRT Plans
Approach
In order to identify meaningful LRT project comparators in other cities to that in Ottawa for the purposes of comparing economic impacts, this study must first ensure that it is, to the degree possible, comparing apples to apples. Thus, in order to identify the most comparable LRT systems in the world, this study applied three screens or filters as set out in Figure A-1. This process narrowed down the gamut of LRT systems (existing and planned) from over 2,200 to 10 that represent the best comparators to Ottawas LRT project.
Figure A-1: Three-Screen Approach
Screen 1. City Characteristics
Source Railway Gazette Urban Rail Projects Database
Criteria Reasonably comparable cities (size, employment, socio-economic characteristics) in reasonably comparable countries, with LRTs Comparable LRT project operating characteristics (electrified, ~13 km, grade separated, above/below ground / tunnels) Publicly available reports or data on project economic impacts with robust and usable economic impacts data 10 LRT Cities
2. LRT Characteristics 3. Data quality and availability
Railway Gazette Urban Rail Projects Web scan, literature review and consultation with associations/ cities
Starting Point
The Urban Rail Projects Database (URPD), consolidated by the Railway Gazette International15, is a comprehensive and exhaustive database listing global urban rail projects. It contains over 2,200 projects in all phases of preparation including conceptual planning/feasibility, under construction, open, cancelled, and those in between. These projects represent 562 cities and 95 countries and include every type of urban rail including, but not limited to, light rail transit, commuter rail, personal rapid transit, heavy metro, monorail streetcar, cable railway, and others. Overall, the database provided the best resource for identifying urban rail projects that are (or would be, for those currently being planned or under construction) comparable to the OLRT.
15
http://www.railwaygazette.com/publications/urban-rail-projects/profile.html
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City Characteristics
Our first filter screens out cities that do not have similar socio-economic characteristics to Ottawa. This was carried out by using gross domestic product (GDP) per capita, a standard measure of economic activity. A range of plus and minus $15,000 (2005 purchasing power parity USD) was determined as appropriate in capturing a fair sample of cities while eliminating most outliers on either side. These parameters were selected as the initial screen as they facilitated the elimination of cities with projects that would not provide meaningful insight on the likely economic impacts that will be experienced in Ottawa. Overall, GDP per capita comparability eliminates most LRT projects in developing countries and in cities that enjoy unique socio-economic conditions and cannot be used as a viable comparison to Ottawa. Further, it is likely that cities with similar socio-economic profiles would share comparable car ownership rates, transportation and other costs that would be vital in determining impacts of public transportation projects on the local economy. Significant variations in GDP also suggest major differences in the shares of household income that are spent on food, housing, and transportation. Thus, residents of cities with dissimilar levels of GDP per capita are likely to face dissimilar choices which, in turn, would make LRT projects less comparable. This processes resulted in 99 eligible LRT cities ranging from New York, Stockholm, and Hartford, as the three cities with highest GDP per capita, to Hannover, Essen, and Marseilles, as the three LRT cities with lowest GDP per capita. The graph below situates Ottawa within this list. The full list of cities established as a result of the application of our first screen and their respective per capita GDPs is illustrated in Figure A-3.
Figure A-2: Filter 1 - Cities with Comparable GDP per Capita (Graph)
New York
Nottingham Austin Phoenix Ottawa Vancouver Rome Hannover $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000
GDP per Capita (US$)

Source: Demographia/Wendell Cox Consultancy, Selection of Cities with existing or planned LRTs (URPD), CPCS
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Figure A-3: Filter 1 - Cities with Comparable GDP per Capita (Table)
City Country GDP per Capita City Pittsburgh Ottawa Jacksonville Amsterdam St. Louis Lyon Sydney Oslo Rochester Birmingham Milan Virginia Beach Toronto Antwerp Tampa-St. Petersburg Brisbane Vancouver Tampa Melbourne Nagoya Zurich Oklahoma City Stuttgart Providence Nuremburg Tokyo-Yokohama Hong Kong Rotterdam-Hague Madrid Rome Auckland Helsinki Edmonton Athens Bilbao Toulouse Leeds Turin San Antonio Adelaide Buffalo Manchester Shizuoka-Hamamatsu Barcelona Fukuoka-Kitakyushu Cologne Marseille Essen-Dusseldorf Hannover Country United States Canada United States Netherlands United States France Australia Norway United States United Kingdom Italy United States Canada Belgium United States Australia Canada United States Australia Japan Switzerland United States Germany United States Germany Japan China Netherlands Spain Italy New Zealand Finland Canada Greece Spain France United Kingdom Italy United States Australia United States United Kingdom Japan Spain Japan Germany France Germany Germany $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ GDP per Capita 41,400 41,200 41,200 41,000 40,900 40,400 40,100 40,000 39,900 39,403 39,100 39,000 38,200 37,900 37,900 37,900 37,600 37,460 37,100 37,000 36,900 36,800 36,700 36,100 35,900 35,700 35,700 35,600 35,500 35,400 35,300 35,300 35,200 34,700 34,600 34,500 34,286 34,200 34,200 33,500 33,400 33,363 32,500 32,300 31,300 31,000 30,400 30,200 29,900
New York United States $ 56,200 Stockholm Sweden $ 55,100 Hartford United States $ 55,000 Denver United States $ 54,700 Minneapolis United States $ 54,600 Hamburg Germany $ 53,500 Dallas United States $ 53,000 Houston United States $ 51,900 Indianapolis United States $ 51,800 Philadelphia United States $ 50,100 San Diego United States $ 50,000 Atlanta United States $ 49,600 Los Angeles United States $ 49,100 Chicago United States $ 48,400 Nottingham United Kingdom $ 48,287 Salt Lake City United States $ 48,200 Milwaukee United States $ 47,800 Nashville United States $ 47,700 Columbus United States $ 47,605 Las Vegas United States $ 47,400 Vienna Austria $ 47,000 Perth Australia $ 46,700 Kansas City United States $ 46,400 Richmond United States $ 46,200 Orlando United States $ 45,900 Cleveland United States $ 45,900 Paris France $ 45,700 Memphis United States $ 45,500 Detroit United States $ 45,500 Austin United States $ 45,300 Raleigh United States $ 45,300 Portland United States $ 44,767 Dublin Ireland $ 44,300 Munich Germany $ 43,800 Baltimore United States $ 43,800 Birmingham United States $ 43,500 Miami United States $ 42,900 Waterloo Canada $ 42,858 London United Kingdom $ 42,700 Copenhagen Denmark $ 42,700 Calgary Canada $ 42,600 Cincinnati United States $ 42,600 Prague Czech Republic $ 42,400 Phoenix United States $ 42,400 Utrecht Netherlands $ 41,900 Frankfurt Germany $ 41,800 New Orleans United States $ 41,600 Sacramento United States $ 41,500 Louisville United States $ 41,500 Singapore Singapore $ 41,500 Source: Demographia/Wendell Cox Consultancy, Selection
of Cities with existing or planned LRTs (URPD), CPCS
33
LRT Characteristics
The second filter eliminated potential comparator cities, which while having a similar level of per capita economic activity to Ottawa, have urban rail systems that are not meaningfully comparable. Based on the URPD, this second filter included a two-fold process which, firstly, excluded cities with urban rail projects that were not LRT projects, such as heavy rail metro and commuter rail systems. Secondly, the filter excluded LRT systems that were not comparable to the OLRT based on the project characteristics available in the URPD such as line length and number of stations. Overall, in order to capture a reasonable number of projects and to reflect the diverse reality of LRT projects around the world, the ranges used for comparability were fairly loose. Thus, as per Figure A-4, lines between 5 and 20 km in length and containing 5 to 25 stations were selected. It should be noted, however, that even systems with identical lengths and station numbers can have vastly different capital costs, depending on topography, geotechnical conditions and prevalence of tunnels or elevated segments these elements will affect the eventual economic impacts. A more stringent filter, with less allowance for line/station length/number, would have eliminated projects which, while potentially informative to the Ottawa case, were built to conform to the idiosyncratic particularities of their cities, budgets, and politics and thus have a lengths/station numbers falling outside a tight band.
Figure A-4: Ottawa LRT Characteristics Characteristic Length Number of Stations Ottawa ~12.5km 13 Range Used for Screen 5 km to 20 km 5 to 25
In order to gather similar information on the LRT systems in the 99 comparator cities, this study used data from the URPD supplemented by websites of the relevant municipal/transit authorities, dedicated LRT project websites, LRT project documentation, and other online sources describing LRT project characteristics. This filter reduced the list of potential comparator projects, undertaken or planned in the last 15 years16, to 20 (and 23 LRT projects)17.
16
Older projects are not included in the URPD and were not sought separately due to a likely lack of current and accessible data. 17 Interestingly, of the 99 cities matching our criteria, 62 have recently or are currently undertaking urban rail construction/expansion projects. In addition, 18 more cities have existing urban rail systems that have not been recently expanded.
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Figure A-5: Potential Comparable Projects Identified City Athens Bilbao Calgary Denver Detroit Dublin Hamilton18 Houston Miami Minneapolis New York Nottingham Philadelphia Salt Lake City San Diego Singapore Sydney Toronto19 Vancouver Waterloo Type [Status] LRT LRT LRT LRT LRT LRT LRT LRT LRT LRT LRT LRT LRT LRT LRT LRT LRT LRT LRT LRT LRT LRT Tram Line Name Olympic Line Bilbaos Tram West Line West Corridor Woodward Avenue Light Rail Green Line BXD Expansion King-Main LRT North Line Corridor Expansion Metromover Central Corridor JFK Airport Airtrain Express Transit Phase Two Route 15 Trolley Mid-Jordan Line Green Line Punggol LRT Metro Light Rail Hurontario/Main Street LRT Sheppard-Finch LRT Canada Line Evergreen Line King Street LRT Length (km) 15 5 8 20 15 6 14 9 7 18 13 8 13 17 9 10 7 21 14 19 11 13 Stations 10 12 6 11 12 6 17 9 22 23 10 13 10 4 15 14 28 29 16 6 10
[Tram]
[Planned] [Planned] [Planned] [Planned]
Data Quality and Availability

The third filter narrows the field of comparable projects to 10 based on the availability of robust economic impact assessment data. Figure A-6 enumerates the projects that met all the criteria. That is, they are located in a city with similar socio-economic conditions to Ottawa, they have similar length and number of stations as the OLRT, and they have relatively robust economic impact data that provides an insight into the effects of their construction and operations on their respective neighbourhoods and cities.
18
While Hamilton does not appear in the original GDP per capita list due to a lack of data available, its GDP per capita can be assumed to be in keeping with that of Toronto. Thus, its LRT project was added to the list of comparable projects. 19 Torontos Hurontario/Main Street and Sheppard-Finch LRTs do not, as currently proposed, meet the criteria laid out in our filter. However, given both the recent and relative comparable nature of the project with the OLRT, in addition to solid available background material, they were included in our analysis.
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Figure A-6: Projects Selected

City Dublin Hamilton Minneapolis Nottingham Salt Lake City Toronto Vancouver Dallas Country Ireland Canada United States United Kingdom United States Canada Canada Canada United States LRT Line Luas Broombridge (Line BXD) King-Main LRT Central Corridor LRT Express Transit Phase Two Mid-Jordan Line Hurontario/Main Street LRT Sheppard-Finch LRT Canada Line Evergreen Line DART Status Planned Proposed Construction Approved Testing Proposed Proposed Operational Planned Operational
It should be noted that while the Dallas DART project does not conform to the filters applied previously due to its size and complexity, it was included in order to provide a benchmark larger system that could provide insight on the final results of Phase 2 of this project. As a recent system composed of three separate lines, but with joint impact, the results of DART Light Rail can help highlight impacts of LRT systems that single short line extension benefits and impact statements may not include. In addition, thorough analysis has been done on the impacts of DART on nearby property values that can inform the potential long-term impacts of the OLRT, and its future expansions, to nearby properties.
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Appendix B: Comparable LRT Systems Statistics and Impacts

Dublin: Luas Broombridge LRT
Dublin: LUAS Broombridge LRT City GDP per Capita 44,300 City Population 500k (city), 1,700k (metro) Length 6 km Number of Stations 13 Power 750V DC overhead traction Train Length 40 metres (up to 53 m) Headway 3 min Underground Characteristics None Projected Ridership 5,000 ppdph (up to 8,700 ppdph) Estimated construction cost Not yet disclosed Opening years 2016
Source: Railway Procurement Agency
The Luas Broombridge (line BXD) expansion is slated to be Dublins next foray into light rail and will expand on its two existing lines. As part of Irelands multi-billion euro Transportation 21 initiative, the Broombridge project plays a key role in the development of Dublins public transportation infrastructure.
Type of Findings Impact Production Impacts Direct Impacts 250 million in construction costs (EUR2002) (estimated, but not disclosed publicly) Indirect Impacts A total of 1,592 person-years of employment will be used in the construction of the BXD line. In addition to providing an economic boost, this will help reduce a currently high unemployment rate in local construction industry in Ireland. Induced A total of 2,700 indirect jobs resulting from supply-chain linkages and salary Impacts expenditure are expected. Consumer Impacts Time Savings The BXD line is expected to provide easier access to central employment locations and reduced journey times for workers. It will serve as a quicker means to travel than car or bus and will allow passengers to enjoy a single direct service (as opposed to modeswitching). Cost Savings Not assessed. Comfort Not assessed. Property Values Not assessed. Retail Spending Expansion of retail activity, as measured by an increased footfall 20 of up to 22% (based on previous Luas line data) will create vibrancy, and employment in retail/associated industries along the planned BXD route. This is not expected to negatively impact retailers outside of catchment area and is expected to create, rather
20
The number of people visiting a shop or a chain of shops in a period of time is called footfall (also foot traffic).
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than divert, spending. Fiscal Impacts Information not publicly disclosed, but operational revenues are predicted to generate sufficient revenues to cover incremental operating costs and that operating surpluses should be sufficient to cover the renewal costs of the infrastructure over a 30-year operating timescale. Demand would be required to fall by 22% below forecast over the lifetime of the project for this projection to fail. Other Economic Impacts Business The project is seen as a catalyst for urban regeneration and brownfield projects. Attraction Tourism Of Irelands top 20 national attractions, seven are located along the BXD line corridor. As city visitors prefer light rail rather than bus due to its greater ease of navigation and locational certainty with stops, the BXD line will help boost site visitation and ease of access. However, there will be some impact on tourism during construction due to noise and statuary/monument preservation measures. Environmental The line is expected to reduce the number of car trips by three million per annum. Benefits Other 10 million additional passenger boardings to the Luas network will be incurred every year. However, this will partly be at the expense of other public transportation modes (bus, heavy rail, metro). The BXD project has an estimated benefit-cost ratio of 2.46 and an IRR of 12.6% with a total benefits NPV of 512m.
Hamilton: King-Main LRT

Hamilton: King-Main LRT City GDP per Capita City Population Length Number of Stations Train Length Headway Projected Ridership Estimated construction cost Opening years $ 38,200 500k (city), 700k (metro) 14 km 17 1-2 vehicles 2-4 min 1,950 (1 vehicle) / 3,900 (2 vehicles) per hr per direction peak period $829 million (C$2008) 2015
Source: City of Hamilton
The King-Main LRT is one option recently studied by Metrolinx for improving transit service through the centre of Hamilton. There is currently a BRT-lite system connecting Eastgate Square in the east via downtown Hamilton to University Plaza west of McMaster University. This is the transit corridor in Hamilton with the highest ridership, with almost 850,000 passenger trips in 2008. The base case for this assessment is articulated buses running in mixed traffic with no priority signals. The LRT option studied would provide a 14.2-km line with 17 stations. LRT would operate in the median of King Street. The economic impact of the LRT option was assessed relative to the base case.
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Unless otherwise noted, all information is drawn from the Metrolinx Benefits Case and all dollarfigures are 2008 Canadian Dollars.
Type of Findings Impact Production Impacts Direct Impacts Construction: Estimated creation of 3,729 person-years of employment, $129.6 million in wages and salaries, and $313.8 million in GDP. O&M: 2021: Annual impact of 81 jobs, $2.8 million in wages and salaries, $6.9 million in GDP. 2031: Annual impact of 132 jobs, $4.6 million in wages and salaries, $11.2 million in GDP. Construction: Estimated creation of 2,064 person-years of employment, $71.7 million in wages and salaries, and $173.7 million in GDP. O&M: 2021: Annual impact of 35 jobs, $1.2 million in wages and salaries, $2.9 million in GDP. 2031: Annual impact of 55 jobs, $1.9 million in wages and salaries, $4.6 million in GDP. Not assessed.
Indirect Impacts
Induced Impacts Consumer Impacts Time Savings Calculated for both transit and non-transit users. The value of time is estimated at $647 million over the 2009-2038 period based on an average of $13 per hour and growth in real terms by 1.6% per year over the period. Cost Savings Estimated reductions in automobile-km travelled are 17 million in 2021 and 42 million in 2031. Corresponding automobile operating cost savings are estimated at $187 million in present value terms over the period 2009-2038.
Comfort Property Values
Safety benefits from accident reduction are estimated at $18 million in present value terms over the period 2009-2038. This estimate is based on a reduction in vehicle-km travelled and an accident cost reduction rate of $0.07/vehicle-km travelled. Not separately assessed. Value uplift for properties within 500m of a station. Vacant residential properties within the catchment area would experience an increase in property value of 4-6%; Vacant commercial properties would experience an increase in value of 8-14%.
The study estimated land value uplift in the middle of the ranges above: within the catchment area, the average uplift is between 1.5% and 3.2%. It is estimated that the potential uplift in assessment value as a result may result in between $50 million to $144 million. [9, p. 44] Retail Spending Largely included in long-term vehicle cost savings that are re-directed to other consumption. Fiscal Impacts Not assessed. Other Economic Impacts Business Transportation cost savings to area businesses captured in ongoing direct and indirect Attraction production impacts. Tourism Not separately assessed. Environmental With an estimated decline in automobile usage, the resulting reductions in CO 2 Benefits emissions are 3,450 tonnes in 2021 and 8,500 tonnes in 2031. The present value of the reduction in CO2 emissions over the period 2009-2038, based on an average value of $0.01 per km is estimated at $2.6 million.
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Other Impacts
Annual incremental (to base case) operating costs in 2031: $12.5 million (C$2008), for a total incremental operating cost of $129 million over 2009-2038 NPV (C$2008). NPV of capital costs is $655 million (C$2008). Projected incremental fare revenue of $15.6 million. The benefit-cost ratio is 1.1.
The Metrolinx Benefits Case included two sensitivity analyses. One examined the sensitivity of some benefits to changing the LRT route to connect with the Hunter Street GO Station. Doing so would decrease the present value of travel time savings to $367 million from $647 million, of automobile cost savings to $156 million from $187 million, and of safety benefits to $5 million from $18 million. Second, the benefits case assessed the sensitivity of the net present value (NPV) of the benefits to three different discount rates, 3%, 5%, and 7%. Under these rates respectively the NPV of the benefits of the project were $338 million (1.4 BCR), $69 million (1.1 BCR), and -$91 million (0.9 BCR).
Minneapolis: Central Corridor LRT

Minneapolis: Central Corridor LRT City GDP per Capita $ 54,600 City Population 400k (city), 3,300 (metro) Length 18 km Number of Stations 15 (+5 existing to be incorporated) Power Electric Train Length 3-car Headway 7.5-min peak / 10-min off-peak Projected Ridership 40,000 per weekday by 2030 Estimated construction cost $957 million ($US2010)
Source: Twin Cities Metropolitan Council
The Central Corridor LRT project is an 18-km line covering downtown Minneapolis and St. Paul. It is currently under construction. When complete it will have 23 stations and an estimated average weekday ridership of 41,690 by 2030. It is scheduled to open in 2014. The estimated cost of construction is $957 million ($US2010). In the Final Economic Impact Statement (FEIS), economic effects were measured for the Minneapolis-St. Paul-Bloomington Metropolitan Statistical Area (MSA).
Type of Findings Impact Production Impacts Direct Impacts Construction: Output impact of $861 million. Earnings (wages and salaries) impact of $285 million. 7,075 person-years of employment. Dollars are measures in the year of expenditure. O&M: Annual O&M costs of $53.9 million ($US2007). $11.7 million ($US2008) per year in additional earnings. Not separately presented from direct impacts.
Indirect Impacts Induced
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Impacts Consumer Impacts Time Savings Only the distribution (e.g. across time of travel and origin of journey) of benefits is reported, no absolute dollar or time savings. Cost Savings Reduction of 6,850 vehicles on the regions roadways per day and 77,100 fewer VMT. Comfort Not assessed. Property Values The LRT is not expected to have a substantial impact on development outside the influence area of most stations (line haul segments of the alignment) where market forces alone would continue to be the primary impetus for continued development. Most redevelopment will be focused in the immediate vicinity of the station area. Station-oriented development activities are not expected to extend outside the onehalf mile station areas, especially where distance between stations is such that the two stations are within entirely different land use settings or districts. [10, p. 5-54] Also, Increases in commercial and residential development densities is expected. [10, p. 5-13] Retail Spending Not assessed. Fiscal Impacts Annual loss of revenue to the municipal government of $154,041 resulting from acquisition of tax-paying properties for construction. To be more than offset over time by taxes levied on the additional earnings generated by the project and by higher property taxes on properties that experience an increase in land value. These effects were not quantified. Other Economic Impacts Business New transportation capacity could create competitive advantages for businesses Attraction located in the Central Corridor LRT Study Area. [10, p. 5-54] Tourism Environmental Not quantified in dollar terms. Benefits Other The Central Corridor LRT Project would effectively link the six primary activity and employment centers in the region: downtown St. Paul and Minneapolis, the University of Minnesota (U of M), State Capitol Complex, Minneapolis-St. Paul International Airport, and Mall of America region (four directly and two through connection to the Hiawatha LRT line). [10, p. 5-1]
Nottingham: Nottingham Express Transit (NET) Phase Two

Nottingham: Express Transit Phase Two City GDP per Capita 48,287 City Population 300k (city), 700k (area) Length 18 km Number of Stations 28 Power Electric Train Length Headway 7.5 min (8 per hour) Underground Characteristics None Projected Ridership 13.2 million per year (at mature ridership) Estimated construction cost 600 (GP2011) Operational date: 2014
Source: Nottingham City
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NET is one of the newest LRT systems to open in the United Kingdom. It opened in 2004 and comprises a 14 km route with 23 stations. A fleet of 15 electric trams are operated on the system. It offers 10-minute peak, 15-minute inter-peak, and 20-minute non-peak services. NET Line Two hopes to mirror these statistics into new, often-underprivileged neighbourhoods in Nottingham.
Type of Findings Impact Production Impacts Direct Impacts 600 million Indirect Impacts 3,120 person-years of employment Induced The project is estimated to have an employment multiplier of 1.05 Impacts Consumer Impacts Time Savings The new LRT line will provide direct access to industrial areas (Lenton) from residential areas (Beeston and Chilwell) and lower the cost and time of daily commutes for workers. In addition, the line will help provide for anticipated a transportation gap resulting from 12% increase in population and 20% increase in people movements in inner Nottingham. Both the new line and its feeder services will provide increased access for impoverished (deprived) areas and grant easier access to employment hubs. This will be coupled with linkages with Line One and will provide significantly improved access to jobs, education opportunities, healthcare, and affordable leisure across the city. Cost Savings Not assessed. Comfort Over and above bus transport, LRTs increase the reliability and certainty of routes and journey times. Property Values Not assessed. Retail Spending Retail spending is likely to be boosted thanks to the greater penetration of the City Centre which will improve access to the heart of the city and northern and southern commercial areas Fiscal Impacts Not assessed. Other Economic Impacts Business Among other similar benefits, the line will provide direct access to the ng2 site (a Attraction major ongoing commercial and residential development). Tourism Not assessed. Environmental Over three million car journeys per annum are expected to be transferred away from Benefits the urban core as park-and-ride facilities will allow for modal switching outside the urban centre. Other NET Line Two will have a large impact on the 38% of regional households with no automobile and will enhance access to employment opportunities for these households. This will particularly aid retirees and lone-parent households whose car ownership rates are at 41% and 51%, respectively. Overall, the NPV of the NET Line Two is estimated to be 736 with a benefit to cost ratio of 2.82:1. Operations of the line will create a total of 166 direct jobs and seven induced jobs.
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Interestingly, the NET Phase Two project was compared to a high-quality bus alternative which, although having a lower cost, also provided much fewer economic benefits (and a lower benefit to cost ratio). Additionally, it was estimated that the benefits of an LRT, which would have priority signalling (at crossings) could not be matched by buses which, while requiring a large number of vehicles, would also have to interact with local traffic. Buses also reduce the road space available for other vehicles and contribute to congestion.
Salt Lake City: Mid-Jordan Line

Salt Lake City: Mid-Jordan Corridor City GDP per Capita $ 48,200 City Population 200k (city), 1,100k (metro) Length 17 km Number of Stations 10 Power Electric Headway 15 minutes Projected Ridership 19,000 riders per day Estimated construction cost $554 million ($US2007) Operational date: 2011
Source: Ride UTA
The Mid-Jordan line, currently under construction in Salt Lake City, Utah is a new branch off the existing Salt Lake City LRT system. It is expected to be completed at the end of 2011 and will replace existing bus routes which, in 2000, were deemed to be unable to keep up with growing population and transit usage demands. It will provide an interconnection between several high population and employment centres in order to ease daily commutes.
Type of Findings Impact Production Impacts Direct Impacts Construction will cost an estimated $521 million Indirect Impacts Not assessed. Induced Not assessed. Impacts Consumer Impacts Time Savings Significant improvement (30% to 60%) in transit time using public transit and marginal improvement in auto transit time due to congestion alleviation. The MidJordan line is anticipated to result in 3.9 (or $22.01 per hour of benefit when factoring in system capital and operating costs) hours of user benefit on typical weekdays in 2030. Cost Savings Previous LRT (TRAX) brought huge operating cost savings. For the full first year of operation, 2000, operating cost per passenger-mile by TRAX plunged to $0.15 USD, compared with $1.04 USD for UTAs bus operations. By 2030, the cost per passenger mile of the Salt Lake City transit system is expected to be $0.58 per passenger-mile which is the same as the anticipated cost per passenger-mile from the Mid-Jordan line. Comfort All population groups along transit corridor will enjoy improved transportation benefits. Property Values Not assessed. Retail Spending Revitalizing of declining commercial areas (i.e. Redwood); station locations tend to concentrate transit activity and increase pedestrian activity in their immediate vicinity. Increases in pedestrian activity may result in increased localized business development
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Fiscal Impacts
opportunities near stations. The Mid-Jordan line is expected to generate a 2% (3,760) improvement in daily transit ridership vs. no-build scenario and thus provide an additional $2 million per year in new revenue in 2030 (at $1.58 average fare).
In addition, the new job opportunities related to the operation of the transit system will produce expendable income for workers and create new sales tax revenues. Other Economic Impacts Business Improved access will expand opportunities to work, recreate, or shop in areas Attraction previously inaccessible by those who do not own or operate vehicles, as well as those commuting by bus. Tourism The presence of LRT may have a positive impact to tourism, but this is not quantified. Environmental It is expected that there will be a general improvement of air quality vs. no-build Benefits alternative, but some localized increases near stations and during construction will occur. Other Availability of light rail and commuter rail believed to be a contributing factor for headquarters relocation from Portland, thus granting Salt Lake City a competitive locational advantage. The new line will also help boost to public transport usage by students. The construction of Mid-Jordan Line requires the acquisition of 15 city properties, six residential buildings and seven commercial buildings.
Toronto: Hurontario/Main Street LRT

Toronto: Hurontario/Main Street LRT City GDP per Capita $ 38,200 City Population 2,500k (city), 7,100k (metro) Length 21 km Number of Stations 28 Train Length 1-2 Headway 3 min Projected Ridership 5,500/hr peak direction by 2031 Estimated construction cost $1.23 billion (C$2010) Opening years 2015
Source: Metrolinx
The Hurontario/Main Street LRT is one of three options assessed for improved transit service along this corridor that connects Port Credit to Downtown Brampton, via Mississauga City Centre Drive, in the western part of the Greater Toronto Area. The option assessed is an onstreet segregated LRT with signal priority. This line would have 28 stations.
Type of Findings Impact Production Impacts Direct Impacts Construction: Estimated creation of 4,506 person-years of employment, $174 million in wages and salaries, and $383 million in GDP. O&M: Annual impact of 406 jobs, $15.1 million in wages and salaries, $34.6 million in
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Indirect Impacts
GDP. Construction: Estimated creation of 2,494 person-years of employment, $96.3 million in wages and salaries, and $213 million in GDP. O&M: Annual impact of 169 jobs, $7.0 million in wages and salaries, $14.4 million in GDP. Not assessed.
Induced Impacts Consumer Impacts Time Savings Travel time savings are included for both transit and non-transit users. With the improvement of transit services along the Main Street in Hurontario between Port Credit and Downtown Brampton, the analysis shows that the investment will generate significant time savings for existing transit users (those who currently travel on buses), new transit users and auto users. The value of time is estimated at an average of $13 per hour and is expected to grow, in real terms, by 1.6% per year over the period. The present value of travel time savings for both transit and auto users over the evaluation period (2009-2038) ... estimated at $1,154 million in present value terms. [26, p. 28] Cost Savings Automobile operating costs savings are derived from a reduction in auto kilometres as a result of the transit investment. The analysis shows that the Hurontario/Main Street project will result in ... a reduction in auto kilometres by 2031 of more than 111 million kilometres per year. Translating these savings into monetary terms, the present value of the automobile operating cost savings over the period is $569 million. [26, p. 28-29] The reduction in collisions is based on fewer vehicle kilometres driven. The monetary savings resulting from a reduction in collisions is calculated based on an assumed value of 7 cents per kilometre in reduced road travel (see Appendix A). The present value of safety benefits over the period is $56 million. [26, p. 29] Comfort Not quantified. Property Values Property values would be affected approximately for 500m around each station. Land value uplift was calculated by multiplying the percentage of value uplift typical for each land use by the total assessment of lands within station areas in each land use category. Within the land area impacted, the average uplift is between 1.5% and 3.1%. It is estimated that the potential uplift in assessment value could be approximately $208 million to $417 million. Retail Spending Not assessed. Fiscal Impacts Not assessed. Other Economic Impacts Business Not assessed. Attraction Tourism Not assessed. Environmental With an estimated decline in automobile usage of 65 million vehicle-km in 2021 and Benefits 111 million vehicle-km in 2031, the resulting reductions in CO2 emissions are 13,000 in 2021 and 22,000 tonnes in 2031. The present value of the reduction in CO 2 emissions over the period 2009-2038, based on an average value of $0.01 per km is estimated at $8.0 million. [26, p. 34] Other The three-year construction period of 2011 to 2014 is expected to generate costs of $1.345 billion (C$2008). Annual operational costs, on the other hand, are to be $15.8 million (C$2008) in 2021, $19.2 million (C$2008) in 2031, as the number of LRT vehicles is increased.
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The total NPV of capital costs is estimated to be $1.022 billion while operating costs are $185 million.
In addition to the analysis presented above, the Benefits Case report also included a sensitivity analysis of the Hurontario/Main Street LRT project. The sensitivity of the NPV of the benefits was assessed using three different discount rates, 3%, 5%, and 7%. Under these rates respectively the NPV of the benefits of the project were $1.141 billion (1.8 Benefit Cost Ratio BCR), $572 million (1.5 BCR), and $220 million (1.2 BCR).
Toronto: Sheppard-Finch LRT

Toronto: Finch-Sheppard LRT City GDP per Capita City Population Length Number of Stations Train Length Headway Underground Characteristics Projected Ridership Estimated construction cost: Opening years $ 38,200 2,500k (city), 7,100k (metro) 39 km 68 stations including 5 underground 3 car 3 min in 2031 5 stations, existing Sheppard Line 7,600 per hour per direction peak $3.6 billion (C$2008) 2015
Source: Metrolinx
The Sheppard-Finch LRT is designed to provide high-quality, rapid transit service to the northeast and north-west areas of the City of Toronto in an affordable way, and provide connections to the subway system. The system would be in-street LRT with frequent stops and a partialexclusive right-of-way. The Metrolinx Benefit Case assessment considered five options. The most relevant to Ottawa is Option 2, in which the LRT runs continuously from Humber College (near Highway 27) to Meadowvale Road in the east end of Toronto. All information is drawn from the Metrolinx Benefits Case unless otherwise noted. All impacts are measured relative to a base case which involves increasing bus service along both Sheppard and Finch Avenues.
Type of Findings Impact Production Impacts Direct Impacts Construction: Estimated creation of 12,500 person-years of employment, $465 million in wages and salaries, and $1.24 billion in GDP. O&M: Annual impact of 270 jobs, $10 million in wages and salaries, $27 million in GDP. Construction: Estimated creation of 6,900 person-years of employment, $255 million in wages and salaries, and $690 million in GDP. O&M: Annual impact of 100 jobs, $4 million in wages and salaries, $10 million in GDP. Not assessed.
Indirect Impacts
Induced Impacts Consumer Impacts Time Savings The value of time is estimated at $857 million over the 2009-2038 period based on an
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Cost Savings
average of $13 per hour and growth in real terms by 1.6% per year over the period. Automobile operating cost savings are estimated at $819 million in present value terms over the period 2009-2038.
Safety benefits from accident reduction are estimated at $87 million in present value terms of over the period 2009-2038. This estimate is based on a reduction in vehiclekm travelled and an accident cost reduction rate of $0.07/vehicle-km travelled. Comfort Not separately assessed. Property Values Area of value uplift is 3,600 hectares. Average premium uplift is between 5.5% and 15.7%. Total potential uplift is $1.59 billion to $4.75 billion. Retail Spending Largely included in long-term vehicle cost savings that are re-directed to other consumption. Fiscal Impacts Not assessed. Other Economic Impacts Business Transportation cost savings to area businesses captured in ongoing direct and indirect Attraction production impacts. Tourism Not separately assessed. Environmental With an estimated decline in automobile usage, the resulting reductions in CO 2 Benefits emissions are 32,707 tonnes in 2021 and 10,750 tonnes in 2031. 21 The present value of the reduction in CO2 emissions over the period 2009-2038, based on an average value of $0.01 per km is estimated at $12.5 million. Because the Sheppard Subway line would be shut down during LRT construction, there would be an increase in (replacement) bus traffic, and associated pollution, during construction.
The Metrolinx Benefits Case included two sensitivity analyses. One examined the sensitivity of some benefits to extending the LRT further west to the Toronto Pearson International Airport. Doing so would increase the present value of travel time savings by $20 million, of automobile cost savings by $85 million, and of safety benefits by $9 million. Secondly the benefits case assessed the sensitivity of the NPV of the benefits to three different discount rates, 3%, 5%, and 7%. Under these rates, respectively, the NPV of the benefits of the project were $1.338 billion (0.6 BCR), $1.545 billion (0.5 BCR), and $1.645 billion (0.4 BCR).
21
The reduction in greenhouse gas emission declines over time, relative to the base case, because as congestion builds in the base case and travel patterns change, base case emissions are reduced.
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Vancouver: Canada Line City GDP per Capita City Population Length Number of Stations Power Train Length Headway Underground Characteristics Projected Ridership Estimated construction cost Operational date $ 37,600 600k (city), 2,100k (metro) 15 km 17 Electric 2-5 vehicles/train 2.7 minutes Elevated and underground sections Daily boardings 104,000 $1.6 billion (C$2010) excluding vehicles 2010
Source: Translink
The Canada Line is an extension to the Vancouver SkyTrain urban rail system. It connects downtown Vancouver with the suburb of Richmond and Vancouver International Airport, a length of 19.2 km incorporating 16 stations. The project had an estimated capital cost of $2 billion (all figures are C$2010 in this section unless otherwise noted). The information below is drawn from the Richmond/Airport-Vancouver (RAV) Line Multiple Account Evaluation. It should be noted that this study is now somewhat dated, as it was conducted in 2001 and the RAV Line (now Canada Line) has been in service for two years. Nonetheless, for the purposes of the present study, the age of the evaluation is not overly important, because benchmarks can be constructed against internally consistent parameters, such as travel time savings per dollar of capital cost. The base case assumes a high-quality, bus-based transit service in the corridor. Impacts were evaluated over the period 2001 to 2050 and deflated to $2001 using a 5% discount rate.
Type of Findings Impact Production Impacts Direct Impacts Not assessed. Indirect Impacts Not assessed. Induced Not assessed. Impacts Consumer Impacts Time Savings (Estimated in conjunction with vehicle operating cost savings) NPV of $544 million on the basis of a value of travel time of $14/hr, which the consultants derived from their own willingness-to-pay analysis and is consistent with US Federal Transit Administration suggested rate of 80% of the average wage rate. The evaluation determined that transit users and auto users share equally in the travel time cost savings benefits and that truck users receive 2-3% of the benefit. Cost Savings Reduced accident risk: cost savings of $32-$41 million NPV. Parking savings of $51 million NPV. Comfort Not separately assessed. Property Values Focused on stations areas with a radius of 300m. Impacts for lands beyond that
48
radius were assumed to be minimal and were not examined. [27, p. 48] Base case assumed an increase in commercial and residential land values of 1.5% per year excluding inflation. With LRT in place, commercial land values were forecast to increase at 3.5% per year and residential land values were forecast to increase at 3.0% per year, excluding inflation. The resulting projected increase in land values is $75 million NPV. These increases assumed no change in zoning. The consultant noted that should zoning changes occur to allow higher value and higher density development, significantly higher land value would result, but no further details were provided. Not assessed. Only construction impacts were estimated as operational impacts were considered not to vary from the base case. The NPV of federal and provincial taxes (income, GST, PST) was $116 million. The federal government would realize roughly 65% of this value. The evaluation also assumes a loss of $15 million to governments from decreased fuel taxes. These decreased fuel taxes result from a reduction in fuel consumption of 3-4 million litres per year and fuel taxes of roughly $0.30 per litre. The NPV of incremental potential property taxes raised with the LRT system is $28 million. The consultant states that this property tax revenue relates to real estate that the rapid transit system would attract around the stations, that would likely occur elsewhere in the region if there were no rapid transit line constructed. [27, p. 53] Other Economic Impacts Business Not assessed. Attraction Tourism Not assessed. Environmental NPV of vehicle emissions reductions: $16.5 million resulting from 18,000 fewer car Benefits trips per day. Corresponding reduction of 600 tonnes in local air pollutants each year. This includes CO2 equivalent, carbon monoxide, volatile organic compounds, nitrous oxide, sulphur oxides, particulate matter, and sulphates. The study is not clear on the values assigned to these pollutants to obtain the dollar-value emissions reduction figure. Other This study also calculated productivity impacts. Based on research from the US Federal Transit Administration (FTA), the consultant estimated an impact on regional GDP of $2.85 billion in NPV terms. This estimate was calculated on the basis of FTA estimates that, for a 1% increase in transit presence, the region will experience a 0.04% increase in annual productivity gain (value added per employee), and a 0.004% economic growth per year. This research was based on examining growth in some 100 U.S. cities where mass transit systems exist. The consultant applied this methodology by defining change in transit presence as change in transit travel demand and change in transit passenger kilometres of travel. [27, p. 53-54] The consultant further notes that while these benefits may be considered high, and may include other benefits presented earlier, particularly value of time saved, this transit presence measure is another indicator of the importance of good-quality rapid transit, and the benefits of constructing the system earlier, rather than later. The beneficiaries, while region-wide, will largely accrue to labour force and employers in the corridor who will benefit from the improved accessibility afforded by the rapid
Retail Spending Fiscal Impacts
49
transit service. [27, p. 54]

Vancouver: Evergreen Line City GDP per Capita City Population Length Number of Stations Power Underground Characteristics Projected Ridership Estimated construction cost $ 37,600 600k (city), 2,100k (metro) 11 km 6 Electric Partly underground 70,000 per day by 2021 $1.4 billion (C$2010)
Source: Evergreen Line Project Website
The Evergreen Line is a planned extension to Vancouvers SkyTrain urban rail system. It would connect downtown Vancouver with the suburb of Coquitlam via Port Moody, a length of 11 km incorporating six stations. The project has an estimated capital cost of $1.4 billion (C$2010 all figures in this section unless otherwise noted).
Type of Findings Impact Production Impacts Direct Impacts Construction to generate approximately 4,000 direct person-years of employment and $268.4 million in GDP. During the operation of the line, 30 jobs would be created, with a direct impact of $2.2 million per year in GDP. Construction to generate 5,531 indirect and induced person-years of employment. Construction to generate indirect GDP of $292.6 million and induced GDP of $99.5 million.
Indirect Impacts Induced Impacts
During operation of the line the indirect impact will be 17 jobs, and the induced impact will be eight jobs. Indirect GDP generated will be $1.2 million per year, and induced GDP will be $0.5 million per year. Consumer Impacts Time Savings The Project Assessment report notes that time savings would be generated for existing transit users, new public transit users and motor vehicles users travelling in a corridor that would be otherwise more congested. It estimates that by the year 2021, ridership on the proposed project would result in annual time savings benefits of $73.2 million with approximately 70% of annual benefits accruing to transit riders and 30% to road users. Cost Savings Vehicle and accident cost savings from reduced fatalities and injuries and reduced property damage due to improved safety. [29, p. 58] Not quantified. Comfort Not considered separately. Property Values A 10% increase in residential property values within a three to five block radius of stations and 15 to 40% increase in residential rents for station-oriented apartments. Retail Spending Not separately identified.
50
Fiscal Impacts
From construction, provincial revenues to be $74.9 million from commodity, personal income and corporate taxes; municipal revenues to be $6.2 million; federal tax revenues to be $75.2 million.
The Environmental Assessment report state that during the operation of the line, the 47 people directly and indirectly employed would pay income and other taxes. The EA notes that while sales taxes and corporate income taxes would be generated by the operation of the line, that these would be offset by reductions in taxes paid on fuel, vehicles and other purchases. No quantitative estimates have been made. Other Economic Impacts Business The project assessment report found that the project would support local municipal Attraction and regional strategic development plans including positive impacts to the tourism sector by providing rapid transit to the affected communities. [29, p. 58] No quantification in dollars was provided. Tourism During operations, the Proponent reports that the proposed Project would have potential positive impacts to recreation and tourism, as it would provide increased opportunities for day-trippers to access events, tourism and recreation facilities in each of the municipalities. [29, p. 63] Not quantified. Environmental The following environmental benefits were identified: a small decrease in CAC and Benefits GHG emissions during the operation of the project; no significant residual adverse noise and vibration effects; no adverse residual effects to human health from electromagnetic field exposure, contaminated sites, or drinking water. No quantification in dollars was provided.
Dallas DART LRT

Dallas: DART Light Rail City GDP per Capita City Population Length Number of Stations Power Underground Characteristics Projected Ridership Estimated construction cost $ 53,000 1,200k (city), 6,500k (metro) 116 km 54 Electric Partly underground 57,700 unlinked passenger trips per day $2.4 billion ($US2009)
Source: Urban Rail
The Dallas DART LRT is not a single line, but rather a system of three existing lines, with a fourth currently under construction (though not included in this analysis). Overall, the Dallas DART provides insight into the operational impact of a more-established, though relatively recent LRT network in the urban landscape of a major North American city. In addition, the DART LRT has been the subject of several academic studies on its impacts on local retail spending and property values that are not available for many other LRT projects.
Type of Findings Impact Production Impacts Direct Impacts Green line: $868 million from construction Orange Line: $1.2 billion from construction
51
Indirect Impacts
Induced Impacts
Blue Line: $289 million from construction Green Line: $1.5 billion in regional economic activity; support almost 11,900 personyears of employment Orange Line: $2.0 billion in regional economic activity and 16,200 person-years of employment Blue Line: $502 million in regional economic activity and 4,000 person-years of employment Green Line: Increased tax income will bring in over $37 million dollars to government coffers on a $160 million boost in local income. Orange Line: $50 million new tax revenue on $218 million new property income. Blue Line: $12 million in indirect business taxes on $53 million new property income.
Consumer Impacts Time Savings Not assessed. Cost Savings Not assessed. Comfort Access to public areas/events such as zoo, circus, concerts and downtown has increased visitation rates and area vibrancy. Property Values A 25% (1994 to 1998) and 13% (1997 to 2001) improvement in real estate valuation around stations for residential and office properties (vs. control group); a 11% decline in industrial property values in the same area (vs. control group). Retail Spending 36.2% jump in retail sales vs. 3.6% in other areas; new retail areas around stations; Fiscal Impacts Sizable increase in tax revenues for state and local jurisdictions from increased property values. Other Economic Impacts Business Value of development projects near stations increases substantially; consists of many Attraction new retailers; LRT has become driver for regional economic development; total value of projects that are attributable to the presence of a DART station since 1999 is $4.26 billion. Tourism Not assessed. Environmental Reduction in congestion and thereby reduce emissions from cars and trucks. Benefits Other Wide citizen support for LRT development; LRT has acted as catalyst for other development and resulted in inter-neighbourhood cooperation on transit issues.
52
Appendix C: Common Assumptions for the Economic Impact Study

In undertaking this economic impact analysis, we were required to make a number of assumptions about how the Ottawa LRT will be configured and the Base Case BRT that it will replace, including how that system will evolve over time. As a starting point, it is important to understand that this economic impact study is undertaken in terms of a: Base Case, in which Ottawa does not build an LRT system, and an LRT Case, in which the proposed LRT in constructed.
Common Assumptions for Both Cases

A number of assumptions are generally common to both the Base Case and the LRT Case. These assumptions are drawn from previous analysis.
Assumption Analysis period Description 30 years: 2019-2039. We must note that excluding the construction phase from the analysis period provides an unbalanced perspective on the net impacts of LRT, since for example travel time delays resulting from construction will not be included to offset travel time benefits in the future. 1.5% across all inputs 5% Traffic estimates were derived from the estimates of total new ridership generated assuming an average auto occupancy of 1.2, and the average trip length on the LRT system of 5.2 km. However, as traffic modelling was not available for the posttransit and pre-transit condition, travel time benefits that may result from the reduction in congestion resulting from the DOTT project were not calculated. This could represent an understatement of the overall travel time benefits. Business Case assumes fare revenue would be the only revenue. Assumed average fare of $2.25. Estimated at $12.73 per hour on the basis of the recent Transport Canada study: Value of Time and Reliability for Local Trips in Canada, March 2008. Escalated to 2010 level using the inflation rate. Source DOTT Business Case (March 2010), p. 48.
Inflation Discount rate Traffic projection
DOTT Business Case (March 2010), Appendix A, p. 1. DOTT Business Case (March 2010)Appendix A, p. 1. DOTT Business Case (March 2010), Appendix A, p. 2.
Fare revenue Value of travel time
53
Base Case
The Base Case is not clearly defined in the Business Case. We understand that the Base Case as included in the Business Case essentially continues with the current BRT system through downtown and incremental improvements are made to the BRT system outside of downtown.
Assumption average service speed BRT Description 27 kph Existing service continues and capacity limitations begin to restrict ridership growth during the analysis period. Developed from Transportation Master Plan. The Base Case assumes that ridership on the transit system is limited at 132 million riders per year. For consistency with the Business Case Addendum, we assume that this level of ridership is reached in 2023. Further growth in ridership beyond 132 million riders per year is attributable to the OLRT. Source DOTT Business Case (March 2010), p. 49. DOTT Business Case (March 2010), p. 48. DOTT Business Case (March 2010), Appendix A, p. 2. Business Case Addendum, p. 1.
Ridership projection
LRT Case
The LRT Case differs from the Base Case in that an LRT system replaces the BRT system between Tunneys Pasture and Blair Stations. We will assume that all other BRT expansion plans are the same as in the Base Case.
Assumption Average service speed Beginning of LRT service Investment Start Year Ridership Description 35 kph 2019 2010 Total system ridership to increase from 93 million to 166 million annual trips, but it is unclear what level would be associated with the Base Case. Ridership on the DOTT portion is expected to increase from 39 million to 51 million in 2021 and 76 million in 2031 (with 34 million of the 76 million are new riders). TMP indicates ridership uplift of 9% due to LRT; equates to 4.6 million additional trips in 2019. Total capital cost of $2.1 billion in C$2009. OC Transpo estimates that the LRT will result in annual Operations and Management (O&M) cost savings of $9.6 million relative to Base Case. Source DOTT Business Case (March 2010), p. 49. DOTT Business Case (March 2010), p. 48. DOTT Business Case (March 2010), Appendix A, p. 1. DOTT Business Case (March 2010), p. 45.
Capital costs Operations and management costs
DOTT Business Case (March 2010), p. 39. DOTT Business Case (March 2010), Appendix A, p. 2.
54 Rapid Transit Network Operational Review, Appendix C, p. 1. DOTT Business Case (March 2010), p. 40.
The bus fleet will be reduced by 152 units in 2021, although it is unclear whether this is relative to a Base Case or whether it is relative to the bus fleet at the time of the analysis. It is unclear whether the transit/BRT system will have higher operating costs during construction of the LRT.
55
Appendix D: Stakeholders Consulted

In the course of preparing this working paper we consulted with the following stakeholders:
Bank Street Business Improvement Area Carleton University City of Ottawa Rail Implementation Office Downtown Rideau Business Improvement Area Ottawa Centre for Regional Innovation Ottawa Chamber of Commerce Rideau Centre Sparks Street Business Improvement Area Transport Canada Transit Projects University of Ottawa Wellington West Business Improvement Area Preston Street Business Improvement Area
56
Appendix E: References
The following are those documents and reports directly and frequently cited in this Report. The left-hand column reflects the short-form title that is used in and the right-hand column reflects the full reference details.
Reference DOTT Business Case (Business Case) Value-Uplift Study Full Reference
Business Case: Downtown Ottawa Transit Tunnel Project: Tunneys Pasture to Blair Station via a Downtown LRT Tunnel, prepared for the City of Ottawa by Metropolitan
Knowledge International in collaboration with Delcan Corporation, 26 March 2010. Strategic Assessment: North-South Light Rail Value Uplift and Capture, prepared for the City of Ottawa by The Corporate Research Group in association with The Altus Group, FoTenn, and The Urbanomics Group, June 2005. Addendum to DOTT (Downtown Ottawa Transit Tunnel) Project Business Case. City of Ottawa, 2011. Update to DOTT (Downtown Ottawa Transit Tunnel) Project Business Case. City of Ottawa, June, 2011. Rapid Transit Network Operational Review, Document 7, City of Ottawa, Transportation Master Plan Update, 2008. http://www.ottawa.ca/city_hall/master_plans/updates/index_en.html Excel file provided by the City of Ottawa containing background numbers on the OLRT Updated Business Case.
DOTT Business Case Addendum (Business Case Addendum) OLRT Updated Business Case Rapid Transit Network Operational Review OLRT Updated Cost and Benefits Analysis
In addition, the following are the sources for data for the comparable LRT systems as well as the sources for aggregate information regarding per capita GDP.
Ref. No. 1 City Project Title Urban Rail Projects Database Top 100 World Metropolitan Regions Gross Domestic Product per Capita Metropolitan Area Gross Domestic Product: USA Economic and Fiscal Impacts of Dallas Area Rapid Transit Light Rail System Buildout and System Operations Assessment of the Potential Fiscal Impacts of Existing and Proposed Transit-Oriented Development in the Dallas Area Rapid Transit Service Area The Initial Economic Year 2011 Author Railway Gazette Wendell Cox Consultancy Wendell Cox Consultancy Terry L. Clower and Bernard L. Weinstein Link
http://www.railwaygazette.c om/publications/urban-railprojects/profile.html http://www.demographia.co m/db-intlmetgdp2005.pdf
2005
2005
www.demographia.com/dbmetrogdp2005
Dallas
DART
2009
http://www.dart.org/about/ economicdevelopment/econ omicimpactstudyjune2009.a sp
Dallas
DART
2007
Terry L. Clower and Bernard L. Weinstein
Dallas
DART
1999
Center for
http://digital.library.unt.edu /ark:/67531/metadc30378/
57 Economic Development and Research Railway Procurement Agency Railway Procurement Agency Metrolinx Metropolitan Council Metropolitan Council Ramsey County Regional Railroad Authority
Impacts of the DART System Luas Broombridge (BXD) Line Luas Broombridge (BXD) Line King-Main LRT Central Corridor LRT Central Corridor LRT Central Corridor LRT Luas Broombridge (Line BXD) Environmental Impact Statement Final Draft Scoping Report for Environmental Impact Statement Hamilton King-Main Benefits Case Final Environmental Impact Assessment Project Website Alternatives Analysis and Draft Environmental Impact Statement Impacts of the Hiawatha Light Rail Line on Commercial and Industrial Property Values in Minneapolis Nottingham Express Transit Phase Two Environmental Assessment NonTechnical Summary Outline Business Case 2009 Nottingham Express Transit Phase Two: Environmental Statement Mid-Jordan Transit Corridor Final Environmental Impact Statement and Section 4(F) Evaluation Mid-Jordan Transit Corridor Project Summary TRAX West Valley Line 2011 completion date for two TRAX lines announced Project Website Eglinton-Scarborough Crosstown Update
Dublin
2010
http://www.dublinluasbroo mbridge.ie/
Dublin
2009
http://www.dublinluasbroo mbridge.ie/ http://www.metrolinx.com/e n/regionalplanning/projecte valuation/benefitscases/Ben efits_Case_Hamilton_FINAL _Feb2010.pdf http://www.metrocouncil.or g/transportation/ccorridor/F EISJuly2009.htm http://www.metrocouncil.or g/transportation/ccorridor/c entralcorridor.asp
9 10 11 12
Hamilton Minneapolis Minneapolis Minneapolis
2010 2009 2011 2006
13
Minneapolis
Central Corridor LRT
2010
Xinyu (Jason) Cao
http://www.cts.umn.edu/Pu blications/ResearchReports/ reportdetail.html?id=1922
14
Nottingham
Express Transit Phase Two Express Transit Phase Two Express Transit Phase Two
2007
Nottingham City Council Nottingham City Council Nottingham City Council U.S. Department of Transportation and Utah Transit Authority Federal Transit Administration UtahRails.net KSL News Toronto Transit Commission Toronto Transit Commission
http://www.nottinghamcity. gov.uk/netphase2/index.asp x?articleid=11402
15 16
Nottingham Nottingham
2009 2007
http://www.nottinghamcity. gov.uk/netphase2/index.asp x?articleid=11398 http://www.nottinghamcity. gov.uk/netphase2/index.asp x?articleid=9341
17
Salt Lake City Salt Lake City Salt Lake City Salt Lake City Toronto Toronto
Mid-Jordan Transit Corridor Mid-Jordan Transit Corridor Mid-Jordan Transit Corridor Mid-Jordan Transit Corridor Crosstown LRT Crosstown LRT
2007
http://www.rideuta.com/file s/
18 19 20 21 22
2007 2011 2010 2010 2011
http://www.fta.dot.gov/doc uments/UT_Mid_Jordan_Dra ft_Profile_09.doc http://www.utahrails.net/ut a/uta-trax-west-valley.php http://www.ksl.com/index.p hp?nid=838&sid=12640462 http://www3.ttc.ca/About_t he_TTC/Projects_and_initiat ives/The_Crosstown/index.j sp http://www3.ttc.ca/PDF/Abo ut_the_TTC/Eglinton_Scarb orough_Presentation.pdf
58
Community Meeting 23 24 25 26 Toronto Toronto Toronto Toronto Crosstown LRT Finch-Sheppard LRT Finch-Sheppard LRT Hurontario/Main Street LRT Environmental Project Report Benefits Case Class Environmental Assessment Study Benefits Case Richmond/AirportVancouver Rapid Transit Project - Multiple Account Evaluation Environmental Assessment Certificate Application for the Richmond-AirportVancouver Rapid Transit Project Richmond-AirportVancouver Rapid Transit Project Assessment Report Canada Line by the Numbers Information Bulletin Evergreen Line Rapid Transit Project Assessment Report Evergreen Line Rapid Transit Project Business Case Evergreen Line Rapid Transit Project Environmental Assessment Certificate Application 2010 2009 2008 2010 Toronto Transit Commission Metrolinx Toronto Transit Commission Metrolinx
http://www3.ttc.ca/PDF/Abo ut_the_TTC/Eglinton_Scarb orough_Presentation.pdf http://www.metrolinx.com/e n/regionalplanning/projecte valuation/benefitscases/Ben efits%20Case%20_%20She ppard-Finch_Final.pdf http://www.toronto.ca/invol ved/projects/sheppard_east _lrt/background.htm http://www.metrolinx.com/e n/regionalplanning/projecte valuation/benefitscases/Ben efits_Case_Hurontario_Main _FINAL_June2010.pdf http://www.translink.ca/~/ media/Documents/rider_info /Canada%20Line/Technical %20Reports/BC%20Transits %20Multiple%20Account%2 0Evaluation%20of%20Rapid %20Transit.ashx
27
Vancouver
SkyTrain Canada Line
2001
IBI Group
28
Vancouver
SkyTrain Canada Line
2004
RAVCo
http://a100.gov.bc.ca/appsd ata/epic/html/deploy/epic_d ocument_208_19477.html
29
Vancouver
SkyTrain Canada Line SkyTrain Canada Line SkyTrain Evergreen Line SkyTrain Evergreen Line
2005
B.C. Environmental Assessment Office B.C. Ministry of Transportation and Infrastructure B.C. Environmental Assessment Office Translink
http://a100.gov.bc.ca/appsd ata/epic/html/deploy/epic_d ocument_208_20399.html http://www2.news.gov.bc.c a/news_releases_20052009/2009TRAN0002000047.htm http://a100.gov.bc.ca/appsd ata/epic/documents/p348/1 296752371874_be36eaf2d9 61c897d54819149d2da8bef 543cc61f183e1c4b7711fab2 79df870.pdf http://www.evergreenline.g ov.bc.ca/documents/Busines s_Case/080219_BusinessCa se.pdf
30
Vancouver
2009
31
Vancouver
2010
32
Vancouver
2008
33
Vancouver
SkyTrain Evergreen Line
2010
Translink
http://www.evergreenline.g ov.bc.ca/document_centre.h tm

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Revised Draft Final Report

Ottawa Light Rail Transit (LRT) Economic Impact Study

CPCS Transcom Limited

CPCS Ref: 10277 August 25, 2011

Other Economic Impacts

1.3 Project Structure

Phase 2: Economic Impact Analysis of Ottawa LRT

1.4 Purpose of this Report

1.7 Organization of this Report

2.1 Comparison to Other Cities

Figure 2-1: Comparison of Capital Spending per Kilometre and Station

Hamilton: King-Main Toronto: Sheppard-Finch

Person-Years of Employment per Million Dollar of Capital Spending

Toronto: Sheppard-Finch Hamilton: King-Main

3.1 Time Savings

3.1.1 Work to Date

DOTT Business Case Update, p. 4.

3.1.2 Comparison to Other Cities

3.2 User Cost Savings

3.2.1 Work to Date

3.2.2 Comparison to Other Cities

3.3.1 Comparison to Other Cities

OLRT Cost and Benefits Analysis DOTT Business Case, p. 46.

3.4 Increase in Property Values

3.4.1 Work to Date

3.4.3 Area Assessment

Blair Cyrville St. Laurent

Hurdman Lees Campus

Downtown East Downtown West LeBreton

Billions of Dollars Commercial Industrial Institutional Residential

3.4.4 Uplift Estimates

Tunney's Pasture 0% 10% 20% 30% 40% 50%

3.4.5 Time Horizon

3.4.6 New Developments

3.4.7 Comparison to Other Cities

LRT: atgrade 500 10% 25% 10% 50% 10% 50% 1% 2%

LRT: grade separated 600

Subway 800 20% 50% 20% 50% 7% 15% 5% 5%

GO Rail 800 20% 50% 20% 50% 7% 15% 5% 5%

Premium % 15% 30% 15% 50% 10% 50% 1% 2%

Figure 3-8: Property Value Uplift from Proximate LRT Stations

3.5 Increase in Retail Spending

3.5.1 Impact on the General Level of Retail Spending

3.5.2 Impact on the Location of Retail Spending

3.5.3 Comparison to Other Cities

3.6 Fiscal Impacts

3.6.1 Direct Fiscal Impacts

3.6.2 Indirect Fiscal Impacts

$2.3 Billion in revenue for 2011

Property Taxes 53%

Provincial 17% Investment Income Payments in 1% Lieu of Taxes 7%

Property Tax Revenue

3.6.3 Comparison to Other Cities

A requirement of current Ontario property tax laws.

4 Other Economic Impacts

4.1 Business Attraction

4.1.1 Comparison to Other Cities

4.2.1 Comparison to Other Cities

4.3 Environmental Benefits

4.3.1 Reduction in Greenhouse Gas Emissions

4.3.2 Reduction in Criteria Air Contaminants

4.3.3 Comparison to Other Cities

Minneapolis: Central Corridor Dublin: Luas Broombrige Toronto: Sheppard-Finch

Toronto: Hurontario-Main Salt Lake City: Mid-Jordan