CHICAGO The Federal Transit Administration said it would give Cincinnati until Dec. 19 to reverse a recent decision to halt a controversial streetcar project or it would pull federal funding.
Cincinnati’s new mayor, John Cranley, a bond attorney, is opposed to the $110 million streetcar and campaigned in part on a promise to kill the project.
The city in 2012 sold $32 million of general obligation bonds to finance the first stage of the project, and had planned under its former mayor to issue another $32 million.
The project has also received $45 million in federal funding. The FTA notified the city of the deadline last week after the Cincinnati City Council voted Dec. 4 to suspend the project, a move that the FTA said it considers a material breach of project agreements.
The FTA’s letter called the council’s move an “unprecedented action to suspend a federally funded transit project while it is currently under construction and after the city committed approximately $116 million in expenditures and contractual agreements,” according to a copy of the letter, from Peter Rogoff, FTA Administrator, published in the Cincinnati Enquirer. “As such, I write to inform you that unless this action is reversed and I receive not later than midnight on December 19, 2013 unequivocal assurances that the city will proceed with the project to completion on the FTA-approved schedule, FTA will immediate terminate all of its grant obligations for the project and initiate a debt collection action to recover money owed.”
Federal investments total $45 million from three programs, including the Transportation Investment Generating Economic Recovery, or TIGER, program.