Nathaniel Hood

Nathaniel Hood is a transportation planner and blogger living in St. Paul. He writes for Strong Towns and Streets.MN.

So, I was watching HGTV ...

Posted by: Nathaniel Hood under Society, Physical infrastructure, Transportation Updated: July 26, 2013 - 4:07 PM

So, I was watching HGTV and there is this show called House Hunters. If I’m bored late at night, you might find me sneaking a peak at this guilt pleasure. The producers of House Hunters usually take a young couple on their first home-buying experience, drag them to three houses, tape them weighing the options and the couple picks one.

The episode last night just happened to be taking place in what I thought looked like the least sustainable community in the United StatesCape Coral, Florida. I jumped on Google and found myself both fascinated and horrified.

The red outline is an area of Cape Coral that is fully supported by road and canal infrastructure, yet – the homes are few and far between. In fact, there are so few homes relative to infrastructure that it boggles my mind on why they just kept on building it out.

The above image is not an anomaly. The majority of the landscape in Cape Coral looks like this. How are 42 houses going to support the infrastructure maintenance of the roads, sewers, electricity, canals, etc.? These are not high-end homes – most are pretty modest and range from about $80k to $200k (from a quick Trulia search). Since I couldn’t believe what I was looking at on Google Maps, I had to double-check with Bing Maps just to see that the Google imagery wasn’t out of date.

Nope. It looks like Bing gives us the same results, which is to say, not good. I’m confused here – why would they keep building roads if no one was building there? Why did they build NW 8th Terrace when they only sold one house on NW 7th Terrace? Or, better yet – why did they build NW 9th Terrace when no homes were sold or built on NW 8th Terrace?

Of course, not all of Cape Coral is empty. Approximately 1/3 is appropriately built up … in the most mind-bogglingly sprawl-ish way. The canal system might have been a good way to sell real estate, but I’m guessing it’s going to become quite the liability. In the age of climate change and rising sea waters, well – I’m curious to see what will be of this former swamp in 50 to 75 years.

And, from the looks of it – you’ll have trouble walking anywhere. At least from what I could see on House Hunters, it looked like there was a lot of free parking though! To abruptly move on, I was reading through a local Cape Coral blog, and ran into a promotional flyer that appears to sum up the community and their aspirations [speaking of which, Cape Coral even makes this suburban-disaster slide show look tolerable].

It is a flyer for a “Family Fun Walk” to celebrate the “Grand Opening” of a road! I can’t imagine anything less fun than walking with children next to a 6+ lane road. I wonder how many people turned up to the event? I did find this chunk of information though: “The total cost for the right-of-way acquisition, design and construction of both the roadway and bridges came to $42 million.” [Source].

Of course, I looked up the weather report and average winter temperatures are a little nicer.

St. Paul Saints Stadium: Number Crunching

Posted by: Nathaniel Hood under Sports, Baseball, Professional baseball Updated: July 10, 2013 - 11:08 AM

Baseball math is intense. It’s called Sabermetrics, or the specialized analysis of baseball through objective evidence. It painstakingly collects every minor tidbit of information, weighs each statistic against all known variables and computes a prediction; it even addresses margin of error.

It would be great if the City of St. Paul took this approach to analyzing it's current downtown stadium proposal.

It’s designed as system of due diligence. Running the numbers, running them again, and predicting the future outlook against all known variables. 

St. Paul is in the process of building a new $66 million stadium for an independent professional baseball team with a known $29 million construction shortfall.

Ballpark Construction Capital Cost Breakdown:

Construction $54 million
Environmental Remediation [add't] $8.8 million
Local / Utility Improvements [add't] $3.3 million
Total $66.1 million

Upfront Capital Cost Breakdown (by Municipality / Private Entity):

State of Minnesota    
Bonding $25,000,000  
Economic Development Grant $2,000,000  
Total $27,000,000  
     
City of St. Paul    
Capital Improvement Budget $1,500,000 * Redirected from local infrastructure
Neighborhood Funding (STAR) $1,500,000 * Redirected from local neighborhoods
Public Works Budget $1,500,000 * Redirected from Public Works
Riverfront TIF Fund (Redirected) $1,500,000 * Redirected from Riverfront TIF Area
Sale of Previous Stadium $3,000,000 * Sale to Port Authority (PPP)
* Spending $700k to demolish old stadium
Total $9,000,000 * Agreed to provide $17 million
     *($8 million shortfall)
St. Paul Saints Organization    
Upfront Downpayment $1,500,000  
Total $1,500,000  
     
Total Monies Available $37,500,000

* $66.6m Total Cost with
$37.5m Avail. in 2013 = $29m shortfall

The St. Paul Saints have promised a $10 million contribution: $1.5 million will be paid upfront for stadium development, while the other $8.5 million will be paid in rent over the next 25 years; approximately $340,000 per year (or around $6,800 rent per game). The St. Paul Saints won’t own the stadium, so the $6,800 per game contribution is more akin to a rent. In the financing scheme, the baseball team has the advantage as they are able to spread their contribution (and financial risk) over 25 years while accuring no debt [more here].

When looking to mitigate risk and maximize public return on investment, finding long-term, sustainable funding sources for infrastructure is essential. In this case, St. Paul has a funding shortfall of $8 million from it’s promised $17 million. Where the remainder of funds is coming from is currently unknown. If a city isn’t able to cover upfront capital costs, how confident are you that they will be able to afford on-going, long-term maintenance costs of the infrastructure without pulling resources from other city essentials?

A question that reaches beyond scrutinizing numbers: why would you break ground on a stadium site in 5 days without a clear understanding of how to address an $8 million funding shortfall? (The $8 million municipal shortfall still doesn’t include the additional $8.8 million in unfunded environmental cleanup liabilities).

Running quasi-sabermetrics on the game-to-game operations doesn’t yield great returns either. The Saints currently average an attendance of approximately 4,911 per game (current capacity = 6,069). Let’s give them the benefit of the doubt that they can add an average of 1,000 additional people into the seats per game in the new stadium.

(5,911 people x $10 ticket) x 48 home games = $2.83 million ticket sales per year

These aren’t new ticket sales, so the $2.8 million is deceiving. Under the assumption of an additional 1,000 fans per game, the number reveal much fewer ticket sales.

(1,000 people x $10 ticket) x 48 home games = $480,000 new ticket sales per year

$480,000 of additional revenue will be generated per year; most of which will go to the St. Paul Saints. Even considering sales tax, this is not an economic windfall considering the City will be effectively paying $680,000 per year (amortized over 25 years) for what amounts to a 16 percent increase in ticket sales revenue. For St. Paul to make up its end of the financing bargain, they would need to immediately impose a $1.13 tax per ticket sold over the next 25 years, not accounting for debt service payments.

Let’s see how the numbers work:

Revenue Generated [Beer]    
MN Liquor Excise Tax Per Gallon $.08 per gallon * 8 pints per gallon ($.01 per beer)
MN Sales Tax .09 percent * Percentage is rounded up
Cost of Beer $4.00 * Estimated average beer price

 

Per pint of beer, the tax revenue works out to be approximately $.36 cents. Now, let’s assume each $1,000 additional fan buys 1 beer; that’s $360 in new revenue generated from alcohol sales per game. Over the course of 50 games, this generates around $18,000 in new revenue. Yet, when you examine the long-term liabilities of stadium financing and costs, does this number even move the dial?

You run the numbers. Do they add up?

Baseball, and sports for that matter, play an integral role in our lives. I coach baseball, play in numerous Rec Leagues and have friends who write ridiculously detailed (and occasionally insightful) pieces for major online publications covering everything (for example; Power Ranking Every Minnesota Vikings Team of the Past Decade). Sports are an important element of society, but that doesn’t mean we shouldn bend over backwards to accommodate if we’re not in a position to afford it.

Of all the stadium deals out there, St. Paul isn't the worst. There are bigger fish to fry. The stadium is tucked into a part of downtown unlikely to see development and it will add a social element to downtown that can't be rivaled at the current stadium. It's not a bad design either. I just wish I was writing this under circumstances where the financing was under control.

St. Paul is the place to be

Posted by: Nathaniel Hood under Government, Politics, Physical infrastructure, Transportation Updated: July 9, 2013 - 11:11 AM

“Minneapolis is booming. St. Paul is … growing.”

Minneapolis is booming. Development is almost everywhere: Downtown. Loring Park. The University. Uptown.

Yes, Minneapolis is being Minneapolis. Check the UrbanMSP forum and you’ll notice that the Minneapolis thread is alive and well. It even breaks down Minneapolis into four distinct categories; all of which have more posts than the single “St. Paul” thread. Even the thread “Suburbs” has more comments.

St. Paul is … growing. To put this in perspective: I was having a conversation at a happy hour over development in both core cities. A friend mentioned that all the action was happening in Minneapolis. I disagreed. St. Paul is happening, just in a different way. It’s composed of smaller, less exciting projects: no skyscrapers, nothing much over 5 stories, lots of mid-sized projects along the Central Corridor and a handful of multifamily projects in neighborhoods.

St. Paul isn’t Minneapolis; and as a resident of St. Paul, I am content with that. You can read about that here.

This is keeping up with the development tradition of each city. Minneapolis goes big. And when St. Paul strikes out, it’s usually because they shortsightedly decided to follow in Minneapolis’ footsteps. Too often I read a quote in a local newspaper that sounds something like, “Minneapolis got this, so it’s only fair that we get this too.” So, Minneapolis gets the Vikings Stadium. That means it’s only fair that St. Paul gets money for the Saints. Minneapolis gets Target Center renovation cash, so we have to improve the Xcel Center. The list could go on …

I don’t know if those asking for money know this, but the people of St. Paul don’t really care that it’s not Minneapolis. In fact, we wish that city leaders would stop trying to be the big city and just concentrate on the things that make St. Paul great.

What makes St. Paul great? And what can be done to aid downtown, if not for stadiums?

I think the answer lies within St. Paul’s strong and vibrant neighborhoods, where you’ll typically find a good mix of housing (both affordable and otherwise) coupled with solid neighborhood retail. When it comes to attracting people, the biggest catalyst is other people. The best way to do that is create a lively mix; that also means no entertainment or cultural districts. But, that’s not all. If St. Paul is looking to improve, I have a couple ideas:

Quick & Dirty Recommendations:

  • Expand housing options; aim for more mid-market housing, too.
  • Don’t be afraid to build small. We need buildings of all types in downtown St. Paul, not just Class A Office Towers.
  • Don’t be afraid of Corner Stores. They provide a great amenity to walkable, urban neighborhoods.
  • Require all new buildings to have an active street frontage. It’s better to have an empty storefront than a blank wall – at least the storefront has potential.
  • Kill the downtown one-ways and calm vehicle traffic.
  • Explore land bridges / highway caps over I-94 / I-35 connecting the Capitol and adjacent neighborhoods.
  • Moratorium on new skyways. We don’t need to tear down what we have, but let’s not expand it. We need people walking the streets of St. Paul.

Now, St. Paul needs to migrate the traits from other areas to form a successful to downtown neighborhood. It’s doing that with Lowertown (minus the housing mix). By the way, the trick is getting existing skyscrapers to behave properly in the pedestrian realm.

I’m basing these recommendations on one of my favorite areas of St. Paul: the stretch along Selby Avenue between Western and Dale Avenues. For starters, it has a surprisingly healthy mix of retail and a range of housing options.

trulia

I captured the surrounding blocks and did a search for all available single-family homes, condos and townhouses $600,000 and under. The cheapest being a 3 bedroom townhouse for $155,000. There’s a single family home for $160,000 and a 1 bedroom condo at $100,00. On the other end of the spectrum, you can spend $400,000 on a high-end condo. If you captured Summit Avenue on the map, it could get a lot higher.

The wide range of housing option is within a healthy walking distance to shops, restaurant, pubs, bike lanes, corner stores and transit. And it’s cheaper, but still urban and cool. That’s what Minneapolis doesn’t have for it’s urbanism: as much affordability.

Herein lies St. Paul’s major strength, and the City shouldn’t be afraid to flaunt it. St. Paul isn’t Minneapolis-Lite. Minneapolis is St. Paul-bloated. By the way – could you buy this for under $200k in Minneapolis? 

Minneapolis is booming, but St. Paul is growing the place to be.

LEED Photo of the Month

Posted by: Nathaniel Hood under Physical infrastructure Updated: July 3, 2013 - 3:33 PM

LEED (Leadership in Energy and Environmental Design) is an ecology-oriented building certification program run under the auspices of the U.S. Green Building Council (USGBC). LEED concentrates its efforts on improving performance across five key areas of environmental and human health: energy efficiency, indoor environmental quality, materials selection, sustainable site development and water savings.

I found this image on a website for a developer.


[Click on Image for Larger Size]

Experts in LEED? Interesting. In my mind, if it's not LEED-ND then it's not LEED.

__
Happy 4th of July!

The Politics of Dumb Infrastructure

Posted by: Nathaniel Hood under Physical infrastructure Updated: June 11, 2013 - 12:04 PM

We have a political situation in the United States where Democrats are too eager to build anything if it creates a job and the Republicans are too willing to call a project a boondoggle without first investigating its merit. It is this standstill that Josh Barro argues in How Republicans Made Both Parties Stupid On Fixing Infrastructure:

Republicans aren’t interested in coming up with smarter, more efficient ways to build rail infrastructure. So;Democrats fear that if they don’t defend wasteful, ill-conceived rail projects, they won’t get any at all. 

Barro uses the example of New Jersey Governor Chris Christie killing a proposed $10 billion railway tunnel into New York City;

The project was overly expensive and the terminal, in particular, was unnecessary — New York Penn Station, which currently receives trains from New Jersey, has plenty of platforms, they’re just used inefficiently today. We could much more cheaply build a new tunnel to serve the existing station.

It’s hard not to apply a local context. The Southwest Corridor light rail alignment comes to mind. The preferred local alternative is one of compromise: taking federal money while it’s still available, getting it done quickly, and bypassing Uptown in the process.

It leads us to a political question of cost-effectiveness.

This requirement puts elected officials in a quandary: should they work to build the most effective transit network possible, or should they limit their ambitions for fear that the federal government will rule out any funding at all? – The Transportation Politic

The densest, most urban neighborhoods of Minneapolis will be passed up partly because we want to get it done quickly, and our decision-makers will argue that something is better than nothing. The result: we’ll build a $750 million project through the least dense neighborhoods of Minneapolis where we’re likely to see the least ridership and the least associated spillover development (there are excellent maps on Net Density outlining population densityaccess to employment and access to automobiles along both routes).

There is certainly merit to building transit in a cost-effective manner, but it shouldn’t necessarily be done at the cost of creating an efficient system that connects meaningful places.

In order to receive money from Washington, Metro will have to show that the proposed route meets national cost-effectiveness guidelines, which are stringent enough to sieve out a large percentage of proposed new transit lines. ­–Transportation Politic

Minneapolis is getting the lesser of two routes due to a lack of political consensus on what makes good infrastructure.  It’s this orderly, but dumb, system that makes planners and politicians play to a bureaucratic equation that is supposed to guide local officials towards the best alternative. Only it never actually works out that way and it usually forces smart people into making highly compromised and less-than-ideal decisions.

With local officials wanting the Federal government to pick-up a majority of the tab on the Southwest Corridor, they are going to play ball with the cost-effectiveness ratio. Getting all the money locally, or through the State Government, would be an impossible political task regardless of the merit. Can you imagine asking the Republican Party of Minnesota to pay for the entirety of a light rail line? In fact, you’d have trouble selling the idea to most Democrats.

Why must we have a cost-effectiveness equation? Is it to select the best projects? No, it’s merely to prove that we’re doing infrastructure in a supposedly financially responsible manner, primarily concerning initial capital costs.

Yet, this equation won’t save us money in the long run because it leads to, above all, cutting corners. We should be cutting the corners that need to be cut, but cutting corners for the sake of cutting corners with no regard for what we’re cutting is to say that all infrastructure projects are created equal. They aren’t and they shouldn’t be viewed as such.

We do need to build infrastructure other than big highways, new bridges and shiny sports stadiums. However, not all rail projects are necessarily a good investment (e.g.: Tampa Bay to Orlando High Speed Train). Democrats should be mindful of this. But, Republicans need to stop saying that everything is a boondoggle. The more they do this, the more they lose credibility and appear out-of-touch.

Republican needs to get off the obsession with big roads and highway spending (in all fairness, Democrats are proponents of large road-related infrastructure projects too). Michelle Bachmann, the Tea Party representative of Minnesota, constantly laments wasteful government spending … expect when it concerns widening I-94 to St. Cloud or spending $750 million to connect exurban Hudson. It is this, I believe, why Barro writes;

But Republicans aren’t interested in building better rail projects — they just don’t want to build them at all. Christie hasn’t made a priority of building a smarter, cheaper Hudson tunnel to replace ARC; instead, he’s widening the New Jersey Turnpike.

Bachmann would be doing her district a much bigger favor if she advocated for a transit line (rail or BRT) that connected downtown Stillwater to St. Paul or to extend the Northstar Line to St. Cloud. Both of these projects could be done for nearly the same cost as the projects she is advocating, but would have a bigger, more meaningful outcome. These could be done in a reasonable and arguably conservative way.

Barro has some more suggestions for Republicans;

Republicans ought to own the issue of American uncompetitiveness on infrastructure costs. They should seize on a report out today from the Competitive Enterprise Institute, about how America’s regulations on rolling stock prevent us from using the same kinds of train cars that European countries do. Our trains have to be custom-designed and heavy, which makes them more expensive, less efficient and less reliable. This is dumb and we should fix it.

Word.

[Note: the requirements of cost-effectiveness have been loosened since 2010, but the Southwest Transit route remains the same].

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