MAX: Red Line Airport Light Rail, Portland, Oregon, USA.

Project Context

Authority: (TriMet) / City of Portland
Area: Portland International Airport, Oregon, USA
Project: 8.9km Train to plane light rail link
Mode: Light Rail Transit
Cost: 125.8 million USD (2001)
Value Capture: Joint Development, Tax Increment Financing (TIF)

Overview

The Portland MAX: Red line light rail extension is an 8.9km link that connects the MAX transit system to the Portland international airport. The development included 4 new stations, a large park and ride, and the private partner was given 120 acres of land which was zoned as mixed use. The light rail had been designed many years earlier with the redevelopment of the Interstate 205. This meant the project had an already dedicated right of way set aside, however the light rail was delivered 10 years prior to plan due to the availability of private equity. It was the first light rail project in the USA to receive no federal funding, state general funds, or tax increases. Annual ridership exceeds one million passengers 1.

Impacts of development

Originally the private partner Bechtel had envisioned using development rights they were allocated to create a commercial centre and a hospitality district both with dense levels of employment. The 9/11, 2001 events meant the economy and airport travel cooled, forcing Bechtel to sell their interests to new developers Trammel Crow. They repositioned the development as a retail centre with a few flagship big box retailers. This ultimately reduced the demand on the light rail services as the anticipated commuters didn’t eventuate. Port of Portland is however still developing commercial land nearby the Light rail as demand facilitates 2.

Value Capture Mechanism

The MAX: Red Line was funded through a unique mix of value capture mechanisms. The first was tax increment financing through the Airport Way Urban Renewal area, which used some debt funds to support the light rail project, the second was the commercial arrangement with Bechtel, where in exchange for contributing a third of development cost they were given the development rights to an 120 Acre land parcel along the light rail route, the last was the arrival levy charged on each passenger coming into Portland International Airport.

Lessons learned

Despite the success of using value capture mechanisms to fund the light rail, the complex arrangements meant substantial approvals, negotiations, and time. Cascade station also yielded suboptimal development due forces of market pressure and the commercial realities Bechtel faced 3.

References

  1. TriMet. (2012). Airport MAX Tour Fact Sheet. [PDF]
  2. Gosling, G., & Freeman, D. (2012). Case Study Report: Portland Max Airport Extension. San Jose, California: Mineta Transportation Institute.
  3. Gosling, G., & Freeman, D. (2012). Case Study Report: Portland Max Airport Extension. San Jose, California: Mineta Transportation Institute.