City hall and Duke Energy have reached an agreement, meaning the streetcar project could be back on track.
The Cincinnati streetcar is set to move forward with construction downtown as early as April.
Cincinnati Mayor Mark Mallory and Milton Dohoney Jr., city manager, announced Friday the city came to an agreement with Duke Energy to move its utilities from under the tracks. Duke and city officials worked together on the project for the past two years, and this new agreement ended the gridlock over utilities.
Though it is currently undecided which party will bear the cost, Duke employees will begin the removal process immediately, Mallory said. The Hamilton County Court of Common Pleas will decide if the bill will be paid by Duke or the city in the next two weeks.
“From the beginning, I said that we would come to agreement with Duke, and we have,” Mallory said. “The distinction that needs to be made here is we are jointly going to seek declaratory judgment. We have our interpretation of the law, and Duke has theirs.”
Blair Schroeder, media spokesperson for Duke, said it’s too early to tell if there will be an appeal from Duke, but believes both parties will exhaust any reasonable effort to see a favorable ruling.
“This lawsuit is the result of two sides working together as opposed to two sides walking away,” Schroeder said. “This lawsuit should not be misinterpreted to reflect a major conflict between Duke Energy and the city of Cincinnati. We simply have reached an impasse.”
Mallory also cautioned against interpreting conflict due to the lawsuit, and said the city’s relationship with Duke is “not adversarial,” and it is “one of the strongest corporate partnerships Cincinnati has.”
The city set aside $15 million in an escrow account in case the judge rules the city has to pay for the utility work, but if the judge rules Duke is responsible, the money will be returned to the city for other uses, Mallory said.
Schroeder noted that the $15 million is probably an accurate estimate, but Duke previously estimated it would cost approximately $18.7 million to move the utilities three feet away from the tracks.
“One thing that gets lost is, we’re not just talking about the customers along the route of the streetcar,” Schroeder said. “The facilities that we’ve been asked to move, it’s sort of what powers most of downtown. This isn’t anything that Duke was trying to be difficult on.”
Dohoney said there are four major components that need to be resolved to go forward with the project — such as building and powering the tracks — but is confident the streetcar will be successful.
“Some people wondered if the Banks would ever get built, and it got built,” Dohoney said. “And then there was the casino — it opens in a couple of weeks. And some people wonder if the streetcar will get built. Every time we make an announcement, it solidifies what we said in the very beginning — it’s going to get built.”
Opponents of the streetcar say the project is simply too expensive amid Cincinnati’s $34 million deficit, and the prospect of the city incurring this $15 million cost worries some.
It is unclear whether or not the ruling will affect the streetcar’s construction as other funding issues have in the past. Supporters of the streetcar say it is an economic stimulus for businesses, but some of that value declined when Ohio Gov. John Kasich pulled $52 million in state funding for the project in 2011 — which kept the route from extending to Uptown.
“There’s no question that there’s value when businesses know that there’s going to be a permanent people mover,” said Greg Landsman, Cincinnati City Council hopeful. “Especially when it lost its funding, I think it became a lot less desirable. But we’ve torn up streets and we’ve spent millions of dollars — I’m not going to vote to spend millions of dollars to repave torn-up streets.”
Mallory is confident the $110 million budget for the streetcar is enough. He added that it is hard to approximate large projects like this, and the potential $15 million bill the city faces is one example why.
Mallory and Dohoney both said they’d like to see the streetcar up and running before Major League Baseball’s All-Star Game comes to Cincinnati in 2015, but couldn’t say for sure if it would actually be ready by then.
“It is hot in Cincinnati, and people need to accept that,” Dohoney said.