Westside Urban Forum Panel: "R" We There Yet?

Let's start the program with you, Richard. You have a two titles of significance here, being a board member of Metro and chair of Metrolink. "R" we there yet, or are we still on the tracks hoping to get "there"?

Richard Katz: As somebody said at one point: Wherever you are is exactly where you are supposed to be. We are poised in Los Angeles County to make the kind of dramatic life-changing decisions and investments in transportation infrastructure that have never been made in this city before.

I see Measure R, but particularly 30/10, on a transformative scale of the magnitude of Mulholland with water or Robert Moses in New York: the 10 projects that we are talking about trying to build, and the 12 projects we want to build in 10 years. To drop a system on a county that never had a system (just pieces of a system) is transformative. To make that kind of mass transit available in this region is transformative. That's what is so exciting about this. How often do you get to work on something that's as much of a game-changer as this?

To answer your question, I don't think we're there, but we can see there from here—which is a change, because there is a "there" that we know about, and the air has gotten better.

Is this like seeing Russia from one's Alaskan porch?

Denny Zane: We're about 70 percent likely to get 75 percent or more of what we want in the federal financing. We are there in that the voters have spoken. This system is going to be built. It is only a question of whether the people in this room live long enough to see it all.

For the Westside in particular: The Exposition Light Rail is funded, it is happening, and it will be opening in Culver City this year, starting construction shortly thereafter to Santa Monica. As the Santa Monica board member, when I looked at the opportunities for transit-oriented development—and to model the building of transit oriented development—it kept my eagerness to be involved very high.

The subway will probably break ground in about a year. The question will be: How fast will it get, and how far? That's a financing question more than a political question, although there are obviously political questions involved. It will get West of the 405, as Jody Litvak promised.

I'm exceptionally optimistic about all this and would say about Los Angeles that we may be the only community in America who can rightfully say that our better days are ahead of us.

What does 30/10 and America Fast Forward mean? Do we achieve this thing?

David Grannis: The answer to the question you asked Denny is, "You betcha!" I agree with Richard; it's transformative.

We hear a lot about disinvestment; we hear a lot about the state crumbling; we hear that the federal government can't get their political act together, etc., etc. We need to take a hard look at what we've achieved in California, but also in Los Angeles. We have stepped up and made the commitments necessary to underpin transformative change that goes beyond just delivering those lines.

What you'll see is now the development community, the business community, and the residential community start to do things very differently because they know that investment is coming. It's way deeper than just a line on a map or a physical line running through a community. It's a big deal. These are huge transformative changes. It's now up to the private sector, the business community, and the residential community. At the end of the day, this isn't about us. It's about our kids. That's where we really need to focus.

How easy is it to honor the 12 projects that were in Measure R and actually do them (i.e., build the Subway to the Sea)?

Richard Katz: The list is the list in order of priority. It's the commitment we made to the voters; it's the order we're doing the projects in. There's an RFP on the street right now for the Gold Line Extension, Denny mentioned Expo, and the Canoga extension of the Orange Line in the Valley is underway.

People who say, "What's Plan B if 30/10 doesn't happen?"—they forget that Plan B is Measure R. It's not, I emphasize, a question about if it's going to happen; it's a question of how fast it's going to happen.

To underscore your point and the importance of the list, when we're in Washington trying to work on this and get creative about financing, people say, "Why don't you just cut two projects out, do it yourself, and not be here in Washington?" And my response is: I'd rather come back to Washington to try to get money than go back to the Metro Board and cut two projects out of that after all the time it took to get unanimity on the Long Range Plan. Only someone who has been to a Metro Board meeting appreciates why Congress is preferable to going back there.

We're sticking with the list. It's very important to the board, and it is very important that that commitment to the public be kept.

We've already started to think of the very last project on that list. There is a billion dollars set aside for connecting the Valley and Government Center in Van Nuys to the subway stop in West LA, in Westwood. We're going to start scoping out what that will look like. On a lot of these projects, environmental is being done now, design is being done now, and once we resolve this financing piece, we're an RFP away from putting people to work.

Has Washington embraced 30/10?

Denny Zane: This proposal has found a seam in the political environment in Washington. It started off a little bigger than the form it is now in-about infrastructure banks-and there was legislation in the hopper and Obama had supported us. But that was too big a risk. The Mayor's Office, Richard, and Jaime de la Vega figured out that to make this work you had to turn it into bite-sized opportunities. One of the big bites, of course, were New Starts grants.

We feel very encouraged about the response of the Obama Administration to the application for about $2.9 billion for the Subway and the Regional Connector. The second piece expands a program that David helped create-the TIFIA Loan Program-back when the Alameda Corridor financing was packaged. TIFIA was a loan program in the Transportation Bill. We need to make that a much more robust program, making it permissible to give loans for programs of projects, i.e., suites of projects, rather than just a project. That one really seems to caught a headwind here.

If you read in the papers or attended the hearing, Senator Boxer (D-California), chair of the Senate Committee on Environment & Public Works, and the new Republican chair of the House Transportation Committee were together in Los Angeles talking about their collaboration in getting the Transportation Reauthorization Bill out by September. They said this would be the centerpiece of that program.

When Mayor Villaraigosa said, "We're hoping for at least $375 million in that program," Senator Boxer said, "We are thinking bigger numbers than that." To which County Supervisor Don Knabe said, "We'd be very happy with $500 million." Senator Boxer took Chairman John Mica (R-Florida) by the arm and said, "The Chairman and I are thinking of much bigger numbers than that."

It was a love fest for this program. We have challenges for the bond part of it, QTIB, because it resembles the Buy America bond program that was in the stimulus package. The Republican side of the aisle does not want to be associated with things that look like the stimulus package. But there are other ideas coming forward that can meet that need coming from other leadership in the Senate, but we can't announce it until they announce. Two pieces look very, very good. The third piece has a better-than-even chance of something good happening.

You have been doing public-private partnerships for a long time. Is there private capital here, and can it be meshed with this program?

David Grannis: There is a ton of private capital. Let's remember that the Red Line was built partly with private capital—a benefit assessment district Downtown. The Portland Streetcar, which everyone touts as transformative in terms of an urban environment, was built with private capital.

If any one of these things doesn't occur just the way we are looking at it today, we'll figure out something else. For the Alameda Corridor, the original message was: "We need $800 million; give it to us." That was not so well received. That got shifted to: "We're not looking for a handout; we're looking for a way out. This is important to the rest of the country."

What these gentlemen have done with this program that is critically important is to reach out to other parts of the country-the mayor of Los Angeles has done exactly that-and say, "OK Denver, you've got fast tracks; you've got a $3 billion hole here. New York, Mayor Bloomberg, you want to build a cross-town subway connector. Dallas, you want to do this. Seattle, you want to do the Alaskan Way Viaduct." Every major metropolitan area in the country has huge infrastructure needs that are not going to met by the gas tax.

This is very appealing if we can figure out a way to leverage dollars and bring private capital in creative ways. We pioneered this with the Alameda Corridor. We pioneered the whole concept of the bank. For the wonks in the room, who look at mind-numbing OMB scoring, it is roughly one-third of the cost to put an outlay dollar on the table. If you are looking at a QTIB, which is a tax-credit bond program like the Build America bond program, what you are really doing is leveraging federal investment threefold. The principles of this are very appealing. The devil is in the details-not in a negative way. It is merely how we get around the table and have the conversation so it works for the country.

We are in a global competitive environment, and from an economics standpoint, we have to compete on the world stage, not on the regional context (although that is there too). Our infrastructure is way behind the rest of the world. This is transformative; this is very, very doable. Private capital can play a role in this. On the LAEDC Infrastructure Committee, we are talking very much about how we can do-we are not out there putting this stuff on the table to confuse the discussion that is going on Washington, which would be counter-productive. As Richard said, Plan B is Plan A, in essence.

Richard, what is the political reality test on the conversations in Washington?

Richard Katz: I am having second thoughts about what I will say about the LA Congressional Delegation and what I won't say. I really can't get in trouble for my thoughts, but we need their help, to the extent that they are capable of giving it.

It is hard for me to admit, but in the last two and a half months in Washington, with a Republican House, we have achieved more on the transportation piece then we did in the last two years when the Democrats were in control of the House. Not true in the Senate, where Barbara Boxer did a herculean job on behalf of Metro and LA County. There were exceptions in Congress, like Jane Harman and some others, who have stepped up in a big way. But the Republicans have been receptive to this.

Why? What is the hook for the Republicans members of Congress?

Richard Katz: The hook for them is jobs.

The difference is that last year when we were back in DC, we were saying that this is an incentive program for self-help counties, like LA, for those who have taxed themselves and done more-to encourage self-help counties by giving enhanced financing mechanisms. The locals benefit greatly. The mechanism is one that has been used in Washington before. No one gets excited by $350 million or even $500 million, but TIFIA is a ten-to-one program, so if there is $500 million in the federal budget that generates $5 billion worth of investment capital for transportation programs.

The fact that senators, in way, are upping the number as opposed to saying, "You are too high; come down," was unusual, in and of itself. The climate is better. The Republicans know they have to produce.

I still have some minor relationship to the way I used to play basketball. That relationship is that it still has a round ball and a court. That is about it. But I feel like the guy who has been standing in the corner waving for three quarters because I am open and I have a shot. They all just sort of glance at us in L.A. But it is the fourth quarter. We are the only ones still around. We're actually spending money, putting people to work, and we have a vision that will be complemented by the visioning for LA, which we don't do much of, except for things like Measure R. They are finally looking at us, and they may actually let us take a shot before the clock runs out. But we are there.

In two weeks, we are going to go back to Washington, and the mayor and Barbara Boxer are going to do a press conference with Tom Donahue from the US Chamber of Commerce and all of our new best friends (apparently) and Richard Trumka from the AFL-CIO, taking 30/10, which is what we call it in L.A. County and rebranding it as America Fast Forward, which is an expanded program that the country can use.

Last year when we talked about this stuff on the hill, we talked about the environmental benefits-cleaner air, mobility, etc. This would only apply to projects that reduce greenhouse gases (i.e., mass transit). The new reality is that roads are back. We don't talk about greenhouse gases much anymore. It's a different audience and different people voting. They like the creativity. They like the fact that this is different.

David mentioned how TIFIA came out of the Alameda Corridor. We went back and said, "Look, we don't want 80 percent; we just want 20 percent." Confused the hell out of them. It didn't fit into the box. The tendency of the status quo and business as usual is that if it doesn't fit into the box: it's way too expensive, we can't do that, or we just don't have the time. It's been two years of plugging along to the point where we are now a part of every conversation because of the work by the mayor, the business community, Denny, organized labor, and the environmental community, which have held together since Measure R was first on the ballot.

When the Chamber goes back and LABC goes back for the annual assault on Washington, Measure R and 30-10 are the centerpieces of that messaging. We have 100 bi-partisan mayors that have signed on to support creative financing as a way to help cities and towns around this country.

It used to be that when everyone from LA went back to Washington, it was a cacophony of sounds pulling federal officials in different directions. Are we now speaking from the same script ?

Denny Zane: I don't know any member of the delegation who has made a negative sound. Nearly all have spoken very favorably. One or two haven't spoken at all. It is very positive. It's exceptional—maybe the first time in my lifetime that we have heard the delegation on the same page. That is because the voters spoke so clearly, the need is so profound and obvious, and the way is so well charted. The traditional geographic rivalries have all given way to the voter acclimation to this direction.

Our politics are very strong. The messaging to Republicans has been, in part, that this is an opportunity to not just be a spender but to be a lender. That makes your money spread much further. Twenty-to-one doesn't just mean $20 for every dollar in the pot; it might mean 20 communities, where before it would have been one community.

When the federal government takes this role, it can help facilitate and stimulate infrastructure investment in multiple communities beyond what it now does. That stimulates local governments, local voters, and others to bring money. This is a very powerful model that will extend beyond transportation. We will see this as a model for infrastructure redevelopment in America over the rest of my lifetime.

I want to properly acknowledge the guy who inspires me and the founder of this organization-Jamie McCormack, whose persistent nagging of the need for activists in Los Angeles to have balls and a vision big enough to measure up to its stature and standing in the world. That is the reason I found the moment in my life to get involved with this.

Everyone has been so hopeful in a really challenging time. How capable in the county of strategically employing and deploying these resources that we seem to almost have our arms around?

David Grannis: That is a very key question, and it is something we have taken a hard look at in the variety of times that we have to face this.

I want to set a little context in terms of what both Richard and Denny were talking about. Roughly 16-17 years ago, the Alameda Corridor went through its process with a Republican Congress and a Democratic president. The mid-terms had just happened. It was gridlock; the government shut down. There was a common thread in Boxer, who quietly worked behind the scenes with Bob Dole and Newt Gingrich and got it done. The hardest part of that was OMB—getting them to understand that the federal government had an asset, that they could actually loan money. They did not have any concept of how to do that. We are over that hump. That is just a little historical setting. It was done very much with the same political metrics.

To your point: Are we positioned? If we bring home the bacon, can we deliver? That is something that the public sector, private sector, and the institutional sector have to sit down and have a serious conversation about. The last thing we can afford to do is screw it up. Candidly, we all have a stake in it. I have been an advocate for a number of years for looking at, maybe, a countywide construction authority approach, where there are a number of stakeholders with that sole focus. There is a bunch of different ways to do that; that is not the only idea out there. The point is that we need to have a dialogue.

The money is obtained from two ends of the bookshelf. One is that you find the bag of money; the other is that you save resources getting to your objective. We have to do both. There has been a lot of good work already in saving in terms of financing this and delivering it early. Given where the markets are, we are going to save a significant amount of money that we otherwise would not, but there is more you can do.

Take the Pasadena Gold Line Construction Authority, which a lot of people didn't like and a lot of people opposed. A lot of people didn't talk to me for a while, which was actually quite refreshing. In any event, when we did that, it was vilified by some people, who, after it was over, had the decency and integrity to say, "That worked." Let's try that again and make it work better. That's the kind of thing we have to do.

Richard and I have young kids. We don't tell our kids we are going to try something and if it doesn't work out, we say, "Oh God, don't try that again." That is antithetical to what we tell our kids. We need to try a lot of things. We don't need to worry as much about making a mistake. We need to worry about the recovery. How do we handle the mistake? How do we move to a better model? We have to look at the delivery mechanisms.

It is not good enough for us as a civic space to sit back and let these kinds of leaders go do the job. The private sector has to engage. There has been a ton of advancement in the way construction is done globally. We need to get those minds at the table. We need to get labor at the table. We have to do this right way. It has to be a team effort.