by James A. Bacon

Momentum is building in the Richmond region to build a 7.4-mile Bus Rapid Transit system along the Broad Street corridor. Transit lovers tout the many blessings that a BRT system would bring, and they discuss the projected costs, but there are two things you never hear them talk about: Risk and ROI (return on investment). No one ever asks if investment in BRT is a competitive use of scarce public capital.

BRT can provide the Richmond region with service comparable to light rail at a fraction of the cost — that’s the message that made it into the lead of an article written by Peter Bacque in the Times-Dispatch this morning. “It’s a very cost-effective way to have a premium transit service,” said Amy M. Inman with the Virginia Department of Rail and Public Transit at a meeting of the Urban Land Institute.

Building a BRT system, in which buses would run on dedicated lanes between Rockett’s Landing, downtown and Willow Lawn, would cost an estimated $53.8 million to build and equip and $2.7 million a year to run. Funding would come from federal, state and local government.

The price is worth it, advocates say, because the bus line would generate millions of dollars of investment along its route. They cite the examples of The Tide light rail line in Norfolk, which has stimulated more than a half-billion dollars of investment, and Cleveland’s celebrated BRT line on Euclid Ave., which has triggered $5 billion in development. The proposed Richmond line bus would run a bus every 10 minutes during periods of peak demand and 15 minutes off-peak. The dedicated lane and the ability to coordinate with traffic signals would make the buses faster and more reliable than regular city buses. The perceived permanence of the transportation enhancement would encourage property owners to invest in new development along the route.

Those observations do have merit. But Richmond BRT advocates seem oblivious to the concept of risk. You will never hear from them, for instance, that not all BRT lines are successful. (Read this Atlantic Cities article to find about the less-than-stellar examples of Cape Town, New Delhi and Bangkok.) Likewise, BRT fans seem oblivious to dangers inherent in building a system largely with state and federal dollars and then having to maintain that system over a decades-long cost cycle with local dollars only. Eventually the bus lane needs to be repaired and the buses need replacing. Also, no one talks about the cost associated with taking two lanes of automobile traffic out of circulation. I don’t believe in privileging automobiles on city streets but it is folly to pretend that eliminating two lanes would be cost-free.

As I explained in a post last April, no one has developed a financial methodology for calculating whether Broad Street BRT would pay its own way or provide a competitive use of local dollars. Advocates are making the case based upon cherry-picked comparisons with other transit systems, vague claims of benefits — BRT would help attract young creative-class workers to the region! — and raw enthusiasm. I am not saying that BRT is a bad idea. I am saying that no one has made a financial case for it.

The acid test. There is an acid test for determining whether Richmond BRT would live up to the promises made for it. Try setting up a special tax district along the route to fund the local share of the project, the ongoing cost of operating the system and the cost of building up a maintenance reserve. I can assure you, property owners along the route will be wildly supportive of the project if someone else is paying for it. They will assure you that BRT will attract tens, maybe hundreds, of millions of dollars of investment. But talk is cheap. Would property owners be willing to subject themselves to a modest surcharge to their property tax in order to make BRT a reality?

If it turns out that property owners are so enthusiastic about the benefits of BRT that they will willingly shoulder a tax surcharge to pay for it, then, great, go for it! Relieving the general public of the burden of paying for the project will disarm the Tea Partiers and anti-tax zealots. The project will be a political no-brainer.

But if property owners aren’t willing to put their money where their mouths are, what does that tell you? It tells you that they have little confidence in those rosy claims of increased property values and turbo-charged development. It tells you that the putative benefits may be way overstated. It tells you that building the project will likely destroy economic value, not create it.