How Stimulus Spending Ruined Buffalo — Lessons for Honolulu

by Panos Prevedouros

Recently Steven Manlanga of the Manhattan Institute authored “How Stimulus Spending Ruined Buffalo” in the Wall Street Journal. It describes that stimulus was the vehicle for ruining Buffalo, New York and at the core of this stimulus was none other but a light rail system:

In his State of the State Address this month, New York Gov. Andrew Cuomo announced $1 billion in incentives to attract new investment. Too bad Mr. Cuomo ignores the factors that help keep areas like Buffalo inhospitable to new investment—namely steep tax rates and the high cost of government.
Sometimes these schemes have done real harm. In the 1970s, the federal government decided to invest $530 million to build a 6.2-mile light-rail system through downtown Buffalo. It was supposed to further spur redevelopment.
Opened in 1985 and anchored by a transit mall that banned cars, the rail line fell well below ridership projections—and downtown businesses suffered mightily from the lack of traffic. As Buffalo landlord Stephen P. Fitzmaurice wrote in 2009: “Walk down Main Street on the transit mall; aside from a few necessities like drug and cell phone stores, blight dominates.” Last month the city received a $15 million federal grant to restore traffic to Main Street.
These massive investment subsidies failed partly because officials were ill-suited to select the right projects and often instead gave money to favored insiders. Even former Mayor Anthony Masiello described the federal government’s redevelopment funds as “a politically motivated system trying to please everybody.”

Lesson 1: Factors that help keep areas like Honolulu inhospitable to new investment—namely steep tax rates and the high cost of government.

Lesson 2: Rail systems are planned as reasons to spur development. They do not. Quite the opposite they produce blight which cost even more money to reverse.

Lesson 3: Yet another rail line where projected rail ridership was a myth (a lie.)

Lesson 4: Clueless politicians (i.e., Hannemann, Carlisle, Calwell) and appointed boards (HART) are “ill-suited to select the right projects and often instead gave money to favored insiders” (Mr. Malanga refers to pay-to-play politics which are prominent in Hawaii.)

Panos Prevedouros’ blog, which is from where this has been reposted (with permission), can be found at :http://fixoahu.blogspot.com

Panos D. Prevedouros, Ph.D. is a professor of traffic and transportation engineering at the Department of Civil Engineering, Univ. of Hawaii-Manoa since 1990. Panos graduated from the Aristotle Univ. of Greece in 1984, and with Masters and PhD degrees in 1990 from Northwestern Univ. (Evanston, IL), a leading academic institution in engineering and transportation. He chairs the Freeway Simulation Subcommittee of the Transportation Research Board. He was president of the Hawaii Highway Users Alliance from 2006 to 2008. Panos co-authored a Transportation Engineering textbook and over 100 reports and technical papers. He received the 2005 Van Wagoner Award of the Institute of Transportation Engineers. He co-organized the 1st International Symposium on Freeway Operations (ISFO) in Athens, Greece, and the 2nd ISFO in Honolulu in June 2009. Dr. Prevedouros served in the Transit Advisory Task Force in 2006 and in the Technology Selection Expert Panel in 2008 of the City Council of Honolulu. He ran for mayor of Honolulu in the 2008 elections and finished 3rd in the primary elections with 18% of the vote from a field of nine candidates.