Growth Platform: Troy, Birmingham Race for $7 Million for Transit Site Written by: Jennifer Chambers, The Detroit News, 2/2/2009 Presented by: Rebecca Grace, February 5,

The Proposal The Troy Intermodal Transit Facility will be located behind Midtown Square shopping plaza near Maple and Coolidge. The transit center will be built around the existing Amtrak line and will stop in Birmingham to give riders access to bus, taxi, and limousine services. The hope is for this transit center to be a hub in a larger regional transit system.

The Fundraising Troy and Birmingham must fundraise $7 million dollars by June 2010 to fund the construction of a transit center. Otherwise, the land will revert back to Grand Sakwa. City officials are hoping to use some of the money from the stimulus package to pay for the project. Birmingham and Troy are paying to have a law firm lobby state and federal lawmakers for funds. This transit proposal will use existing infrastructure, greatly decreasing the cost.

The Future The transit hub could be successful, but that depends on people knowing where to catch a bus, taxi, or train. Transit hubs can boost redevelopment, especially condos and lofts around the transit center.

Some Economics Troy and Birmingham chose to locate the transit center at the given location because they expect its profits to be greater at this location than any other location. This would also imply that the consumer surplus will be greatest at this location: a ij -p i > a ik -p k Using Lind’s model, if we assume zero profits, benefits can be measured in change in land values. D=(p’ 1 -p 1 )

Some Economics The Troy Intermodal Transit Center is expected to bring condo and loft developments to the area. We know that as distances increase, rents decrease. R=PQ-C-tQu ∂R/ ∂ u=-tQ Before, residents had to drive further to reach a mass-transit location. Now residents will be able to reduce their transportation costs by living in the adjacent condos and lofts, essentially making their transportation costs zero. PQ-C>PQ-C-tQu As transportation costs get lower, rents are higher. If rents rise that will mean a higher p’ 1, so p’ 1 will be greater than p 1. Since D=(p’ 1 -p 1 ) > 0, there will be a positive benefit from the transit center.

Final Thoughts Since consumer surplus is measured by the difference in the net earnings of the firm and the rental value of the land, the amount of surplus will depend on the number of people who choose to use the mass transit. – Relative closeness to Detroit – Walkability to and from stations – Personal preferences City leaders plan to hold brainstorming workshops in the spring for public input on the proposal.