1. North Shore Connector Cost-Benefit Study of Extending Pittsburgh Light Rail Transit to the North Shore Parshwanath Adiraja Dan Concepcion Nicolas Zitelli April 28, 2004

2. North Shore Connector Project Details Costs Benefits Financing Conclusion

3. North Shore Connector will extend LRT 1.2 miles Source: Port Authority of Allegheny County 1.2 miles 0.3 miles

4. North Shore Connector strategy entails three major goals VISION More effectively link the Pittsburgh central business district with the North Shore area GOALS Enhance accessibility to major sports, cultural, and civic facilities Improve linkage between North Shore fringe parking and Golden Triangle employment centers Facilitate economic development in the Pittsburgh North Shore Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003

5. Current Light Rail System Data Current Data 7.5 mil. boardings per year Approx. 20,500 boardings/day $1.25 peak/$1.75 off-peak Estimated “T” revenue = $11.25 mil. per year Source: Port Authority of Allegheny County

6. Ridership expected to begin by 2008 North Shore Connector complete Full Funding Grant Agreement in FY 2005 federal budget Final design and engineering Construction begins 20032004200520062007 2008 Source: Port Authority of Allegheny County

7. Costs Assumptions 30 year timeline (2004-34) Construction from 2004-08 Discount rate = 7% Figures include 0.3 mile Convention Center spur Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003 Costs CapitalOtherOperating

8. Capital Costs Capital Costs = $362.8 mil Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003

9. Operating Costs Operating Costs = $8.5 mil/year Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003

10. Other Costs Environmental Disruption Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003

11. Total Costs $362.8 mil Capital + $8.5 mil/year Operating Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003 = $411.9 mil Total (NPV)

12. Benefits Assumptions 30 year timeline (2004-34) Ridership begins in 2008 Discount rate = 7% Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003 Benefits OperatingOther

13. Operating Benefits Ridership = 16,100 boardings/day Average fare = $0.89/trip Time saved = 8 min/trip Average wage rate = $33,837/year Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003 Operating Benefits = $175.9 mil (NPV)

14. Other Benefits Economic development Access to North Shore Downtown access to commuter parking lots North Shore redevelopment will take place with or without LRT extension There is already existing PAT bus service Parking lots on North Side have existing shuttle service to downtown Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003

15. Total Benefits Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003 $175.9 mil Operating + $0 Other = $175.9 mil Total (NPV)

16. North Shore Connector will have a negative NPV Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003 $175.9 mil Benefits (PV) -$411.9 mil Costs (PV) = -$236 mil Total (NPV)

17. Project needs a discount rate of -2.1% to break even

18. Federal, State, and Local government money will finance capital costs Source: Federal Transit Administration, New Starts Report – Stage II LRT Construction (Pittsburgh, PA), Nov. 2003 $290.3 milFederal (Grant) + $60.5 milState (Appropriations) + $12.1 milLocal (Appropriations) = $362.9 milTotal Funding

19. Look Familiar?

20. Opportunity Costs Operating Budget of Pittsburgh = $338 mil (2004 estimate) Expenditures on general services = $22.29 mil (2004 estimate) Pennsylvania’s expenditure on cost of premiums for Medicare participation = $14.2 mil

21. Conclusion LRT ridership expected to increase 78% because of North Shore Connector Government funding should cover capital costs Revenues from fare and other sources need to cover operating costs Other benefits (apartments, offices, retail) might arise from North Shore Connector