Downtown Las Vegas Multi-modal Transportation Project Las Vegas, Nevada. Appendix A: Benefit-Cost Analysis
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1 Downtown Las Vegas Multi-modal Transportation Project Las Vegas, Nevada Appendix A: -Cost Analysis
2 EXECUTIVE SUMMARY Appendix A: Cost Analysis Table 1: s and Description by Evaluation Criteria Long-Term Outcomes Categories Types of Societal s Livability Low Income Mobility Portion of total trip cost and travel time savings accruing to low income users. Community Development (net of capitalized travel cost savings; to avoid double counting of benefits this analysis will not include low income mobility as an additional monetized benefit) Property value increase capitalized on enhanced accessibility benefits; reduced travel times and reduced household transportation expenditures. Project will enable a phased rezone of 119-acres adjacent to the project limits Economic Competiveness Safety State of Good Repair Environmental Sustainability Transit User Cost Savings (improved travel time reliability) Bike and Pedestrian Crash Reduction Not Quantified: Pavement Maintenance Savings Not Quantified: Reductions in Air Emissions from Light Industrial to Mixed Use. Improved transit travel time reliability from reduced roadway closures during major storm/flooding events. Safety benefits due to a decrease in the frequency of vehicle crashes with pedestrians and bicyclists. Not Quantified: Reductions in pavement maintenance costs due to changes in roadway usage. Not Quantified: Reductions in pollutants and greenhouse gases due to reductions in private vehicle use relative to base case. Table 2: Project Matrix Current Baseline & Problem to be Addressed Baseline: Two outdated bidirectional roadways with limited multi-modal and stormwater infrastructure. Normal program maintenance is assumed on both existing roadways. Problems Addressed: Limited multi-modal accommodation, bike/ped safety hazards, barriers to enhanced livability, and stormwater management problems. Change to Baseline/Alternatives Conversion of Main and Commerce Streets to an efficient one-way couplet system with safety enhancing multi-modal provisions and improved stormwater infrastructure. Type of Impacts Enhanced access to destinations for bike/ped and transit users, Increased bike/ped safety, Improved transit travel time reliability. Population Affected by Impacts Number of affected persons will be addressed in each specific section. Bicyclists and pedestrians will benefit from enhanced safety, transit users from improved travel time reliability, and adjacent property owners from increased property values. Economic Monetized value of reduced bike/ped crashes, improved transit travel time reliability, and increased property values within the project area. Summary of Results A summary table of the estimated dollar value of project costs and benefits can be found below in Table 3. Page Reference in BCA Safety s: pp. 6 Economic Competiveness s: pp. 8 Livability s: pp. 11 1
3 Table 3: Summary of -Cost Analysis Bike Safety Pedestrian Safety Route HDX Reliability Route SDX Reliability Route 108 Reliability Route 206 Reliability MU Rezone Year Project Cost Total Net 2012 $3,200,000 $0 $0 $0 $0 $0 $0 $0 -$3,200, $15,548,109 $0 $0 $0 $0 $0 $0 $0 -$15,548, (opening) $6,500,000 $20,228 $20,056 $11,053 $30,164 $7,797 $16,934 $18,513,000 $12,119, $0 $20,931 $20,754 $12,602 $37,439 $7,966 $20,243 $0 $119, $0 $21,659 $21,476 $14,369 $46,470 $8,138 $24,199 $0 $136, $0 $22,412 $22,222 $16,384 $57,678 $8,314 $28,928 $18,513,000 $18,668, $0 $23,192 $22,995 $18,680 $71,590 $8,493 $34,580 $0 $179, $0 $23,998 $23,795 $21,299 $88,857 $8,677 $41,337 $0 $207, $0 $24,833 $24,623 $24,286 $110,290 $8,864 $49,414 $0 $242, $0 $25,697 $25,479 $27,691 $136,892 $9,056 $59,070 $18,513,000 $18,796, $0 $26,590 $26,365 $31,573 $169,910 $9,251 $70,612 $0 $334, $0 $27,515 $27,282 $35,999 $210,892 $9,451 $84,410 $0 $395, $0 $28,472 $28,231 $41,046 $261,760 $9,655 $100,903 $0 $470, $0 $29,462 $29,213 $46,801 $324,896 $9,864 $120,620 $18,513,000 $19,073, $0 $30,487 $30,228 $53,363 $403,261 $10,077 $144,189 $0 $671, $0 $31,547 $31,280 $60,844 $500,528 $10,294 $172,363 $0 $806, $0 $32,644 $32,368 $69,374 $621,255 $10,517 $206,043 $0 $972, $0 $33,780 $33,493 $79,101 $771,102 $10,744 $246,304 $14,069,880 $15,244, $0 $34,954 $34,658 $90,190 $957,091 $10,976 $294,432 $0 $1,422, $0 $36,170 $35,863 $102,835 $1,187,942 $11,213 $351,963 $0 $1,725, $0 $37,428 $37,111 $117,253 $1,474,473 $11,455 $420,737 $0 $2,098, $0 $38,730 $38,401 $133,691 $1,830,116 $11,703 $502,949 $0 $2,555, $0 $40,076 $39,737 $152,435 $2,271,540 $11,955 $601,225 $0 $3,116,968 Totals $25,248,109 $610,806 $605,630 $1,160,869 $11,564,147 $204,459 $3,591,456 $88,121,880 $80,611,138 NPV 7% $21,876,911 $253,240 $251,094 $384,760 $3,320,123 $87,481 $1,091,047 $48,201,617 $31,712,451 Total Net Present Value of s (7%): $53,589,362 Total Net Present Value of Costs (7%): $21,876,911 Total Net Present Value of s Including Costs (7%): $31,712,451 Cost Ratio = 2.45:1 2
4 Total Project Costs Total capital project cost for the Downtown Las Vegas Multi-modal Transportation Project is $25,248,109. Maintenance costs are neutral between a no-build and build alternative. The determination of $0 in maintenance costs, from a benefit-cost analysis perspective is based on the following factors: The project redesigns and reconstructs existing roads. There are no material changes from the CE certified by FTA through the NEPA process; all project activities take place within the existing right of way. If the project did not proceed, the existing roads would still need to be maintained. Any new costs associated with the redesigned couplet street system (for example, routine maintenance of landscaping) would be offset by reduced maintenance on the older system. The City of Las Vegas has identified a 12-year rehabilitation cycle for Main Street, with the next scheduled HMA Overlay to occur in If the multimodal project is implemented this overlay would be deferred in 2016 to a later date. However, future rehabilitation on both Main and Commerce Streets would occur, offsetting any benefits accrued in Since existing roads are being improved through narrowing and the addition of multi-modal provisions, it is anticipated there will be less vehicle traffic at lower speeds. This should result in pavement maintenance equal (if not less) than the existing system. Additionally, long-term external costs common with roadway projects such as noise and environmental pollutants resulting from the use of the facility should be similar (if not less) than the existing system. Indeed, the project is designed to encourage multi-modal travel modes that are more environmentally sustainable. Thus, while the benefits of reduced noise and pollution will not be quantified, their benefits are anticipated to accrue to society. Given no increase in maintenance or external costs, the total cost of the project is equal to the capital outlay for construction: $25,248,109. The following table shows total cost and the net present value (based on a discount rate of 7%) for the project: Table 4: Total Project Costs and Net Present Value Year Construction 2012 $3,200, $15,548, $6,500,000 Total $25,248,109 Net Present Value (7%) $21,876,911 3
5 s - Safety Promoting a Safe City is one of six official priorities adopted by the Las Vegas City Council. Complete Streets are roadways designed to safely and comfortably accommodate all users, regardless of age, ability or mode of transportation. A primary objective of the Downtown Multi-modal Project is to enhance the safety of bicyclists and pedestrians accessing close downtown regional amenities and transit services. Enhancing non-motorized user safety is increasingly important as it is anticipated that installation of new bicycle infrastructure will attract more bicyclists and pedestrians to the area. This analysis used the -Cost Analysis of Bicycle Facilities tool developed by the National Cooperative Highway Research Program and the Minnesota Department of Transportation. This tool anticipated that new bicycle infrastructure on the one-way couplet system will attract 39 additional bicycle commuters and an additional 3,635 total cyclists (middle estimates of increased demand). Because the focus of the Downtown Multi-modal Project is to enhance non-motorized user safety, the safety benefits accrued by automobile occupants will not be included in this analysis. The project s safety benefits can be measured by a decrease in the frequency of vehicle crashes with pedestrians and bicyclists. Possible safety benefits related to reductions in crash severity or a diversion of travel to safer alternative modes will not be measured. Additionally, this analysis will focus only on the infrastructure benefits of the Downtown Multi-modal Project. Any possible benefits derived from public awareness or educational campaigns that may occur in relation to the innovative colored bicycle lanes will not be considered. The first step in analyzing the safety benefits of engineering improvements is to establish a baseline, or no-build alternative. This baseline condition must be tied directly to the facility being improved by the Downtown Multi-modal Project. The RTC s web-based Crash Information Application identifies that within the past three years ( ) there have been 9 non-fatal pedestrian/automobile crashes and 4 non-fatal bicycle/automobile crashes within the project limits (1). This is the most recent data available, and using an analysis period of three years helps avoids annual anomalies that may occur. Determining the crash rate (a) for the no-build and build alternatives can be found using the following formulas (2): No-Build = a x VMT Build = a x VMT x Crash Modification Factor (CMF) Assumptions The CMFs obtained from the Crash Modification Clearinghouse (3) were selected based on both the prior roadway condition and the proposed engineering improvements, with care taken not to simply select the CMFs with the largest positive safety impacts. 4
6 Crash Type Prior Condition Countermeasure CMF Selected Vehicle/Bicycle No Bike Lanes Install Colored Bike Lanes 0.41 Vehicle/Pedestrian No Bike Facilities Install Bike Lanes 0.74 (mean) Both the no-build and build analysis forecast an annual increase in automobile traffic levels. The RTC has projected that trip assignments on Minor Arterials will increase at a rate of approximately 3.47% annually. The no-build and build bike/ped crash rates are assumed to remain constant throughout the analysis period. Table 5: Bicycle and Pedestrian CMF Induced Crash Reductions Annual Year No-Build Bike Build Bike Bike Reduced No-Build Pedestrian Build Pedestrian Annual Pedestrian Reduced NA NA NA NA (opening) Table 2 above establishes a reasonable count of non-motorized incidents that are likely to be avoided by construction of the Downtown Multi-modal Project. The next step in the process is to monetize the value of a statistical life (VSL) and injuries based on USDOT guidance. However, because the crash injury reports used in the RTC s web-based Crash Information Application are based on reporting from the Las Vegas Metropolitan Police Department, it is first necessary to convert these reported crashes into the Abbreviated Injury Scale (AIS) before applying monetary unit costs. 5
7 Based on the KABCO-AIS Conversion Table provided in the NOFA, this analysis applies a conservative assumption of injury levels and assumes all injuries as AIS 1. This level was selected because regardless of the KABCO injury severity level reported at the scene, the majority of crash injuries are AIS 1 as reported by medical personnel. This analysis utilizes the updated VSL and Relative Disutility Factors as per the USDOT 2011 Interim Adjustment guidance (4). No increase in the VSL or Relative Disutility Factors is assumed throughout the analysis period. Table 6: Valuation of Bicycle and Pedestrian Crash Reductions Year Annual Bike Reduced Annual Pedestrian Reduced VSL AIS 1 Bike Safety Pedestrian Safety $6,200, $0 $ $6,200, $0 $ (opening) $6,200, $20,228 $20, $6,200, $20,931 $20, $6,200, $21,659 $21, $6,200, $22,412 $22, $6,200, $23,192 $22, $6,200, $23,998 $23, $6,200, $24,833 $24, $6,200, $25,697 $25, $6,200, $26,590 $26, $6,200, $27,515 $27, $6,200, $28,472 $28, $6,200, $29,462 $29, $6,200, $30,487 $30, $6,200, $31,547 $31, $6,200, $32,644 $32, $6,200, $33,780 $33, $6,200, $34,954 $34, $6,200, $36,170 $35, $6,200, $37,428 $37, $6,200, $38,730 $38, $6,200, $40,076 $39,737 Total $610,806 $605,630 Net Present Value (7%) $253,240 $251,094 Safety s Total: $1,216,436 Net Present Value of s: $504,334 s Economic Competiveness In light of the severe recent economic downturn in Las Vegas, a key component of any major infrastructure project is long-term economic competiveness. Ensuring travel times are minimized, especially for transit modes, can increase regional economic 6
8 competiveness. However, because the Downtown Multi-modal Project anticipates property value increases directly attributable to increased accessibility, this analysis will focus on travel time reliability to avoid double counting of benefits. Property value increases resulting from accessibility increases will be analyzed in the Livability s section. Travel times within the project limits are currently not reliable because of roadway flooding during major storm events that can impede transit routes and cause major delays. The project is located within one of the oldest areas of downtown, and the existing storm drainage facilities in the area were constructed in the 1930 s and 1940 s, are now well beyond their service life. The proposed project includes a partnership with the Clark County Regional Flood Control District (CCRFCD) that would construct a new $6.8 million storm drainage system that would protect approximately 308-acres of property from roadway closures. Prior to the year 2000, flooding within the area was common and severe, with a flooding-related fatality occurring However, while the CCRFCD has made significant investments in protecting Downtown Las Vegas, the threat of flooding still remains. Because the project is specifically designed to increase multi-modal travel options, travel time reliability benefits will be calculated for transit users only. The first step in calculating the economic impacts of storm-related roadway closures is to determine the value of time for transit users. Consistent with FTA guidance, this analysis values travel time savings at 50 percent of the Median Household Income published by the Census Bureau, divided by 2,000 hours (5). Assumptions The 2010 Median Household Income for Clark County, Nevada was $51,525. Using this figure values travel time savings at $12.88/hr. While Household Income is typically projected to increase annually, in Las Vegas it has actually been declining since 2008 (6). Therefore, this analysis conservatively assumes a constant $51,525 Household Income throughout the analysis period. However, research has shown that transit waiting time unit costs are two to five times higher than in-vehicle transit travel time (7). Under pleasant conditions waiting can have a low or even positive value, but under unpleasant conditions, like during historically heavy Las Vegas rainfall events, their costs are significantly higher than in-vehicle times (8). For this reason, this analysis assumes the higher value and uses a five times delay premium. Transit travel time reliability savings must be tied directly to the facility being improved by the Downtown Multi-modal Project. This analysis will focus on the 4 primary transit routes operating within the 308-acre Flood Control Protection Area that would benefit from reduced storm induced delays. This analysis assumes each road closing lasts approximately 8 hours and causes approximately 30 minutes delay per transit vehicle. This is a conservative estimate, as roadways typically stay closed until the following day and traffic densities are extremely high downtown when storms close key roadways. 7
9 For the baseline condition, this analysis assumes only 1 major storm event per year that results in road closures and assumes no closures if the Downtown Multi-modal Project is implemented. There is no certainty in predicting rainfall weather patterns; some years there are more, some years less, than 1 major storm event resulting in road closures. While this analysis does not assume an increase in the value of travel time savings throughout the study period, it does assume annual ridership (calculated as Passengers Per Service Hour (PPSH)) to increase consistent with observed historical trends. The PPSH reflects the affected population that would benefit from project implementation. Over the past year, ridership on the Henderson & Downtown Express (HDX) has increased 14%, the Strip & Downtown Express (SDX) increased 24%, and the 108 and 206 increased 2% and 20% respectively. Table 7: Transit Travel Time Reliability Valuation Route HDX PPSH HDX Travel Time + 5X Delay Premium Route SDX PPSH SDX Travel Time + 5X Delay Premium 108 Travel Time + 5X Delay Premium 206 Travel Time + 5X Delay Premium Route 108 Route 206 Year PPSH PPSH $0 76 $0 29 $0 46 $ $0 94 $0 30 $0 55 $ (opening) 43 $11, $30, $7, $16, $12, $37, $7, $20, $14, $46, $8, $24, $16, $57, $8, $28, $18, $71, $8, $34, $21, $88, $8, $41, $24, $110, $8, $49, $27, $136, $9, $59, $31, $169, $9, $70, $35, $210, $9, $84, $41,046 1,016 $261, $9, $100, $46,801 1,261 $324, $9, $120, $53,363 1,565 $403, $10, $144, $60,844 1,943 $500, $10, $172, $69,374 2,411 $621, $10, $206, $79,101 2,993 $771, $10, $246, $90,190 3,715 $957, $10,976 1,143 $294, $102,835 4,611 $1,187, $11,213 1,366 $351, $117,253 5,723 $1,474, $11,455 1,633 $420, $133,691 7,104 $1,830, $11,703 1,952 $502, $152,435 8,817 $2,271, $11,955 2,334 $601,225 Total $1,160,869 Total $11,564,147 Total $204,459 Total $3,591,456 7% NPV $384,760 7% NPV $3,320,123 7% NPV $87,481 7% NPV $1,091,047 Economic Competiveness s Total: $16,520,931 Net Present Value of s: $4,883,411 8
10 s Livability There are several livability benefits this project could generate, the most important being improved non single-occupant-vehicle transport mode accessibility to high quality destinations. The Downtown Multi-modal Project is uniquely situated in a central location close to numerous high-quality destinations. This is demonstrated by the fact that the downtown area has the highest Walk Score (a measure of destination accessibility) of any other area in Las Vegas. Walk Score uses Google map data to compute the distance between residential addresses and nearby commercial destinations. Numerous studies have shown a relationship between higher Walk Scores and increases in real estate values (9, 10). This demonstrates that consumers attach a monetary value to walkability. This value may stem from saving money on driving expenses, or from travel time savings by virtue of a closer proximity to destinations. In a paramount study on the economic value of walkability, researchers found that only Las Vegas, among 14 other large metropolitan areas, did not have a positive relationship between Walk Score and real estate values (9). The primary reason Las Vegas is an outlier when compared to other metropolitan areas is because areas in Las Vegas with high destination accessibility are not designed for walkability. The current roadways and sidewalks within the project limits were designed to support industrial land uses, and do not function as multi-modal accessibility corridors. Assumptions Implementation of the Downtown Multi-modal Project would directly enable a major planned rezone of 119-acres adjacent to the project limits from Light Industrial (LI) to Mixed Use (MU). 9
11 Figure 1: Existing LI Zone Shown in Blue Figure 2: Proposed MU Zone Shown in Red Property surveys conducted by the City of Las Vegas Right-of-Way and Real Property offices demonstrate that the proposed 119-acre rezone would greatly enhance property values. Current assessed values of LI land are between $1.5 - $3.0/sq ft. and MU land is between $ $30.0/sq. ft. These land values do not include the value of overlying private development, which cannot be included as a societal benefit. However, this property value increase over and above the developer s investment may be included as a monetized benefit of the Downtown Multi-modal Project. Land use changes in connection with mixed-use development can enhance proximity between homes, workplaces, and shopping, translating to real value in long-term savings on travel-time and household transportation expenditures. The MU property value increase is assumed to capitalize on enhanced these accessibility benefits such as reduced travel times and reductions in household transportation expenditures. Therefore, to avoid the double counting of benefits, this analysis will not include these as additional monetized benefits. The benefits table below is a conservative estimate of property value increases resulting from project implementation. The analysis only includes properties within a 0.5-mile radius of the project limits, as per FTA guidance on the functional relationship between pedestrian improvements near transit stops (11). Additionally, only properties identified for rezone by the City of Las Vegas will be included; and the low range of MU values and high range of LI values will be used. Finally, to account for the recent economic downtown in regional property values, this analysis does not assume any annual property 10
12 value increases, despite an almost 4% annual increase in land values for the project area between the years (12). Without implementation of the Downtown Multi-modal Project, the proposed rezone to MU could not be supported by the baseline existing transportation network. Because the size of the 119-acre rezone is large for a downtown environment, this analysis anticipates phasing in MU zoning between the years 2014 and Additionally, the societal benefit from a property value increase is only a one-time stock benefit that does not accrue annually. Thus, benefits are only monetized for the years in which a rezone action is completed. Table 8: MU Rezone Property Value s Phased Number of Acres Rezoned Existing LI Value in Rezone Area Net Rezone s: MU Value Minus Existing LI Value Year LI Value (Acre) MU Value (Acre) MU Rezone Value 2012 $130,680 $871,200 0 $0 $0 $ $130,680 $871,200 0 $0 $0 $ (opening) $130,680 $871, $21,780,000 $3,267,000 $18,513, $130,680 $871,200 0 $0 $0 $ $130,680 $871,200 0 $0 $0 $ $130,680 $871, $21,780,000 $3,267,000 $18,513, $130,680 $871,200 0 $0 $0 $ $130,680 $871,200 0 $0 $0 $ $130,680 $871,200 0 $0 $0 $ $130,680 $871, $21,780,000 $3,267,000 $18,513, $130,680 $871,200 0 $0 $0 $ $130,680 $871,200 0 $0 $0 $ $130,680 $871,200 0 $0 $0 $ $130,680 $871, $21,780,000 $3,267,000 $18,513, $130,680 $871,200 0 $0 $0 $ $130,680 $871,200 0 $0 $0 $ $130,680 $871,200 0 $0 $0 $ $130,680 $871, $16,552,800 $2,482,920 $14,069, $130,680 $871,200 0 $0 $0 $ $130,680 $871,200 0 $0 $0 $ $130,680 $871,200 0 $0 $0 $ $130,680 $871,200 0 $0 $0 $ $130,680 $871,200 0 $0 $0 $0 Total 119 Total $88,121,880 Net Present Value (7%) $48,201,617 Rezone Action Year The net increase in land values can be found by subtracting the MU rezone value with the existing LI zoning. Livability s Total: $88,121,880 Net Present Value of s: $48,201,617 11
13 References 1. Regional Transportation Commission of Southern Nevada, Crash Information Application, Sinha, Kumares and Labi, Samuel. Transportation Decision Making: Principles of Project Evaluation and Programming Hoboken, New Jersey: John Wiley & Sons, Inc. 3. US Department of Transportation, Federal Highway Administration, Crash Modification Factors Clearinghouse US Department of Transportation, Office of the Assistant Secretary for Transportation Policy. Treatment of the Economic Value of a Statistical Life in Departmental Analyses 2011 Interim Adjustment US Department of Transportation, Federal Transit Administration Final Guidance on New Starts Policies and Procedures. Accessed on 9/7/ Smith, Hubble. Las Vegas Review Journal. Nevada is No. 1 in Income Decline. Published 9/28/ html 7. Pratt, Richard H Traveler response to transportation system changes, interim handbook. TCRP Web Document 12, Transportation Research Board Litman, Todd Valuing Transit Service Quality Improvements. Journal of Public Transportation, Vol. 11, No Cortright, Joe. Walking the Walk. CEOs For Cities. August, Pivo, Gary and Fisher, Jeffrey. Effects of Walkability on Property Values and Investment Returns. September, Federal Register. Vol. 76, No. 161 / Friday, August 19, 2011 / Notices. US Department of Transportation. Federal Transit Administration. Final Policy Statement on the Eligibility of Pedestrian and Bicycle Improvements Under Federal Transit Law Clark County, Nevada. Department of the Assessor. City of Las Vegas Redevelopment Areas Secured Tax Roll. 12
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