The Kansas City Experiment on Transport Infrastructure Investment

Kansas City (the Missouri one) presents an interesting natural experiment on the effect of transportation infrastructure investment and economic performance. There are two main investments occurring with each investment focused on a very different technology. First, the city is aggressively pursuing a streetcar system with the hope of encouraging downtown development. Second, Google is installing Google Fiber, an ultra high speed Internet service. These two strategies represent two very different approaches to economic development, and figuring out which approach has a greater (if any) effect on the local or regional economy can help guide future public and private investment decisions.

The streetcar project is a two mile, $102 million rail line mostly along Main Street. Last December voters of a special downtown streetcar district approved a 25 year property and sales tax increase to help fund the project:

Voters approved, 351 to 198, a 1-cent sales tax increase, and 344 to 206 property tax increases to help pay for a $100 million, two-mile streetcar system. It will run from River Market to Union Station, primarily on Main Street.
The tax increases, authorized for 25 years, will apply only within the defined boundaries of a downtown streetcar district. That covers roughly River Market, the Central Business District, the Crossroads and Crown Center.
Yet already, Jackson County Executive Mike Sanders is floating the possibility of a broader countywide transit tax that might alleviate some of the burden on downtown.
Wednesday’s results occurred in an unusual mail-in election and involved only registered voters living within the streetcar district.
The city hopes to begin construction next year and start running the streetcars in 2015.

 Local officials are extremely optimistic about the outcome:

“This is going to be a game changer for our city, especially our downtown,” City Councilwoman Jan Marcason said.
“It will be historic,” Mayor Sly James said. “This is only a beginning.”
Supporters emphasized that just running streetcars through two miles of downtown was never the goal. They hope Wednesday’s results springboard a more extensive system of streetcars running to the Plaza and the University of Missouri-Kansas City, and along east-west corridors such as 12th Street or 18th Street.

To place downtown Kansas City in a bit of context, here is Strongtowns' Charles Marohn explaining current traffic and pedestrian conditions in Kansas City:


Looking at the Google project, here is a description of the service:

Google Fiber is a project to build an experimental broadband internet network infrastructure using fiber-optic communication[1] in Kansas City, Kansas, and Kansas City, Missouri; the location was chosen following a competitive selection process.[2] Over 1,100 communities applied to be the first recipient of the technology.[3] On March 30, 2011, Google announced that Kansas City, Kansas will be the first community where the new network would be deployed.[4]
After building an infrastructure of the network, in July 2012, Google announced pricing for Google Fiber. The service will offer three options. These include a free broadband internet option, a 1 Gbps internet option for $70 per month and a version that includes television service for $120 per month. The internet service includes 1 terabyte of Google Drive service and the television service includes a 2 terabyte DVR recorder in addition to the Google Drive service. The DVR will record up to eight live television shows simultaneously. The television options also includes a Nexus 7 tablet that will act as a remote control for the system. In addition, television service will also stream live program content on iPad and Android tablet computers. Neighborhoods that receive the service will be selected through demand from Kansas City area residents and Google has set up a website to pre-register for the service.[5]

Early anecdotes and media stories suggest that the Google Fiber service is already having an impact on the local economy. Here is one article, and here is another. From the latter:

Soon no one will snicker when Kansas City residents proudly refer to their city as the “Silicon Prairie.” As the Associated Press reports, the presence of Google’s (GOOG) high-speed fiber network has turned Kansas City into a major attraction for tech startups that want to take advantage of the fastest Internet connectivity in the United States. According to the AP, “several startup-friendly locations… have sprouted up in Kansas City in recent months” in residential buildings that give entrepreneurs room for “working on their ideas for the next high-tech startup.”

These news stories should not be treated as rigorous evidence any more than stories promoting streetcars. Yet it is the case that these two transportation infrastructure investments are both expected to be transformative for the local and regional economy. I have my own ideas about which one is more likely to prove a successful investment, but the Kansas City experiment should be closely followed to help inform what types of investment in new transport networks should be made in the upcoming decades.

Read more here: http://www.kansascity.com/2012/12/12/3962799/kc-streetcar-taxes-pass-overwhelmingly.html#storylink=cpy

Read more here: http://www.kansascity.com/2012/12/12/3962799/kc-streetcar-taxes-pass-overwhelmingly.html#storylink=cpy