**Exposition Corridor LRT**

**Los Angeles, California**

(November 2004)

The Los Angeles County Metropolitan Transportation Authority (LACMTA) is
proposing to construct a 9.6-mile light rail transit (LRT) line
extending from the 7^th^ and Metrocenter Blue Line light rail /

Red Line heavy rail station in the Los Angeles central business district
(CBD) west to Culver City. The proposed project would use the existing
"Exposition" railroad right-of-way, which was used for passenger rail
service until the 1950's, to provide high-capacity transit service to a
number of activity centers within the corridor. These include the
University of Southern California, Exposition Park, Crenshaw, and Culver
City. The project includes the construction of eight new stations, three
park-and-ride lots with 1,300 spaces, and the purchase of 16 light rail
vehicles. The project would operate with five-minute headways and
provide for intermodal connections with LACMTA Metro Rapid Bus service
at the Vermont, Western, Crenshaw, and La Cienega stations.

The Exposition Corridor parallels the Santa Monica Freeway (I-10) which
currently maintains traffic volumes exceeding 300,000 vehicles per day.
I-10 is often cited as the most congested highway in Los Angeles.
Likewise, local arterials operate at capacity, and travel speeds average
below 20 miles per hour. Existing local bus transit service is severely
delayed by these congested road conditions; nevertheless, bus routes in
the corridor are heavily utilized. The communities in the corridor have
a population density of over 20,000 persons per square mile. Moreover,
approximately 50 percent of the households within ½ mile of proposed
stations have incomes of less than \$25,000 per year, and 30 percent do
not have access to an automobile. Because of the existing land use and
limited room for roadway expansion, LACMTA's proposal to improve
transportation capacity is to extend rail service into the corridor from
the Blue Line, which is one of the most heavily utilized light rail
lines in the U.S. The Exposition Corridor LRT project will thereby
provide improved access to employment opportunities beyond the corridor
and CBD, including other areas served by LACMTA's regional rail system.

+------------------------------------+---------------------------------+
| **Summary Description**            |                                 |
+------------------------------------+---------------------------------+
| **Proposed Project:**              | Light Rail Transit              |
+------------------------------------+---------------------------------+
| ** **                              | 9.6 Miles                       |
|                                    |                                 |
|                                    | 8 Stations                      |
+------------------------------------+---------------------------------+
| **Total Capital Cost (\$YOE):**    | \$552.1 Million (includes       |
|                                    | \$34.2 million in finance       |
|                                    | charges)                        |
+------------------------------------+---------------------------------+
| **Section 5309 New Starts Share    | \$276.0 Million (50.0%)         |
| (\$YOE):**                         |                                 |
+------------------------------------+---------------------------------+
| **Annual Forecast Year Operating   | \$50.7 Million                  |
| Cost:**                            |                                 |
+------------------------------------+---------------------------------+
| **Ridership Forecast (2025):**     | Not Available                   |
+------------------------------------+---------------------------------+
| **Opening Year Ridership           | Not Available                   |
| Forecast:**                        |                                 |
+------------------------------------+---------------------------------+
| **FY 2006 Finance Rating:**        | # Medium-High                   |
+------------------------------------+---------------------------------+
| **FY 2006 Project Justification    | **Not Rated**                   |
| Rating:**                          |                                 |
+------------------------------------+---------------------------------+
| **FY 2006 Overall Project          | **Not Rated**                   |
| Rating:**                          |                                 |
+------------------------------------+---------------------------------+

FTA acknowledges the progress made by LACMTA in the development of an
acceptable financial plan for the Exposition Corridor LRT project.
However, the project is *Not Rated* at this time because LACMTA's
current estimate of ridership and travel-time benefits is not considered
reliable. FTA will work with LACMTA to address these travel forecasting
concerns, and will re-rate the project when they have been
satisfactorily addressed.

**Project Development History and Current Status**

After abandoning plans to construct and operate an extension of its
heavy rail system underneath Wilshire Avenue, LACMTA undertook an
alternatives analysis to analyze and evaluate feasible alternatives in
the Mid-City/Exposition corridor. In March 2000, LACMTA initiated a
Draft Environmental Impact Statement (EIS) to analyze transportation
alternatives in the re-defined Exposition corridor. FTA approved the
project's entry into preliminary engineering in February 2002. LACMTA
has initiated the Final EIS and plans to complete the NEPA process in
Spring 2005.

**Significant Changes Since Last Evaluation** (**November 2003**)

The project cost has increased from \$505 million to \$552 million
because LACMTA added financing costs (consistent with FTA policy),
escalated the capital costs due to inflation, and incorporated some
grade separation improvements into the project scope. LACMTA also
improved its systemwide financial plan to reflect more realistic revenue
forecasts and adopted a new operating cost model, resulting in revised
systemwide operations and maintenance costs.

###### Project Justification Rating: Not Rated

The project is *Not Rated* for project justification based on the
absence of reliable information on the cost effectiveness of the
project, despite a *Medium-High* rating for transit-supportive land use.

####### *Cost Effectiveness Rating: Not Rated*

As noted, LACMTA has not submitted to FTA reliable estimates of the
travel-time benefits of the Exposition Corridor LRT project. Therefore,
FTA cannot rate its cost effectiveness. FTA is continuing to work with
LACMTA to develop an acceptable and reliable travel forecast for the
project.

####### *Transit-Supportive Land Use Rating: Medium-High*

The *Medium-High* land use rating reflects the *Medium-High* ratings
assigned to existing land use and transit supportive plans and policies
and the *Medium* rating for the performance of land use policies.

**Existing Land Use: Medium-High**

-   The proposed project is located within an abandoned urban rail
    corridor that has been developed into predominantly industrial land
    uses. There are transit-supportive population and employment
    densities throughout the corridor, within a block of the rail
    alignment in most areas.

-   Over 84,000 residents and nearly 76,000 jobs are currently located
    within ½ mile of the proposed station sites. The corridor contains a
    high number of trip generators, especially in the eastern end, which
    encompasses downtown Los Angeles, the Los Angeles Convention Center,
    Staples Center Arena, the University of Southern California and
    Exposition Park (including the Memorial Coliseum, Sports Arena,
    California Science Center, and the California Afro-American Museum).
    High trip generators in the western end of the corridor include
    downtown Culver City and the West Angeles Cathedral.

-   Pedestrian accessibility is transit-supportive and sidewalk
    facilities are provided along a dense grid street network. However,
    parking is generally plentiful around station areas and comprises a
    significant portion of proposed station area land uses.

**Transit-Supportive Plans and Policies: Medium-High**

-   LACMTA and the city of Los Angeles have jointly adopted a land use
    and transportation policy that provides strong incentives and
    prototypes for development around station areas.

-   A station area planning process is underway and more
    station-specific land use plans and policies are being developed.
    There are opportunities in the corridor for the expansion of high
    trip generators, especially the museums around Exposition Park and
    an entertainment district around Staples Center, which may promote
    additional redevelopment.

-   Redevelopment zones around the Crenshaw and Vermont stations provide
    an opportunity to promote economic development around proposed
    station sites. Additionally, current industrial land around rail
    stations may provide further opportunity for new transit-oriented
    development as station sites are planned and designed.

**Performance and Impacts of Policies:** **Medium**

-   LACMTA has recently begun to pursue transit-supportive land use
    under its joint development program. The developments have occurred
    primarily near Red Line subway stations, as the opportunities along
    other rail corridors have been limited.

-   Transit-oriented development projects along LACMTA light rail lines
    have been successful in cities that have provided significant
    planning support to the projects, such as mixed-use developments at
    two Pasadena Gold Line stations.

#### 

#### 

####  

####### Other Project Justification Criteria 

+------------------------------------------+--------------+------------+
| **Mobility Improvements Rating: Not      |              |            |
| Rated**                                  |              |            |
+------------------------------------------+--------------+------------+
| **[Within ½-mile radius of boarding      | 75,800       |            |
| areas]{.underline}:**                    |              |            |
|                                          | 78,300       |            |
| Existing Employment                      |              |            |
|                                          | 7,900 (27%)  |            |
| Projected Employment (2020)              |              |            |
|                                          | 9,475\*      |            |
| Low Income Households (% of total HH)    |              |            |
|                                          | 988\*        |            |
| **[Average Per Station]{.underline}:**   |              |            |
|                                          | **[New Start |            |
| Employment                               | vs.          |            |
|                                          | Baseline]{.  |            |
| Low Income Households                    | underline}** |            |
|                                          |              |            |
| **Transportation System User Benefit Per | N/A\*        |            |
| Project Passenger Mile (Minutes)**       |              |            |
+------------------------------------------+--------------+------------+
| **Environmental Benefits Rating: Not     |              |            |
| Rated**                                  |              |            |
+------------------------------------------+--------------+------------+
| **[Criteria Pollutant (Reduction in      | **[New Start |            |
| tons)]{.underline}**                     | vs.          |            |
|                                          | Baseline]{.  |            |
| > Carbon Monoxide (CO)                   | underline}** |            |
| >                                        |              |            |
| > Nitrogen Oxide (NO~x~)                 | N/A          |            |
| >                                        |              |            |
| > Volatile Organic Compounds (VOC)       | N/A          |            |
| >                                        |              |            |
| > Particulate Matter (PM~10~)            | N/A          |            |
| >                                        |              |            |
| > Carbon Dioxide (CO~2~)                 | N/A          |            |
|                                          |              |            |
| **[Criteria Pollutant                    | N/A          |            |
| Status]{.underline}**                    |              |            |
|                                          | **[EPA       |            |
| > Carbon Monoxide                        | De           |            |
| >                                        | signation]{. |            |
| > 1-Hour Ozone (O~3~)                    | underline}** |            |
| >                                        |              |            |
| > 8-Hour Ozone                           | Serious      |            |
| >                                        | No           |            |
| > Nitrogen Oxide                         | n-Attainment |            |
| >                                        | Area\*       |            |
| > Particulate Matter                     |              |            |
|                                          | Extreme      |            |
| **Annual Energy Savings (million British | No           |            |
| Thermal Units)**                         | n-Attainment |            |
|                                          | Area\*       |            |
|                                          |              |            |
|                                          | Severe       |            |
|                                          | No           |            |
|                                          | n-Attainment |            |
|                                          | Area\*       |            |
|                                          |              |            |
|                                          | Maintenance  |            |
|                                          | Area\*       |            |
|                                          |              |            |
|                                          | Serious      |            |
|                                          | Non-         |            |
|                                          | Attainment\* |            |
|                                          |              |            |
|                                          | N/A          |            |
+------------------------------------------+--------------+------------+
| **Operating Efficiencies Rating: Not     |              |            |
| Rated**                                  |              |            |
+------------------------------------------+--------------+------------+
| **System Operating Cost per**            | > **         | **[New     |
|                                          | [Baseline]{. | Start]{.un |
| **Passenger Mile (current year           | underline}** | derline}** |
| dollars)**                               | >            |            |
|                                          | > N/A\*      | N/A\*      |
+------------------------------------------+--------------+------------+

\* Indicates that measure is a component of rating for each criterion.

N/A indicates information was not available for this entry.

# [Local Financial Commitment Rating: Medium-High]{.underline}

The *Medium-High* rating for local financial commitment is based on
*Medium-High* ratings for the New Starts share of project costs and for
both the capital and operating finance plans.

####### *Section 5309 New Starts Share of Total Project Costs: 50%* 

####### *Rating: Medium*

LACMTA is requesting a 50 percent New Starts share of total project
costs, which results in a *Medium* rating for this measure.

+-------------------------+-----------------------+--------------------+
| **Locally Proposed      |                       |                    |
| Financial Plan**        |                       |                    |
+-------------------------+-----------------------+--------------------+
| **[Source of            | **[Total Funds        | **[Percent of      |
| Funds]{.underline}**    | (\$mi                 | To                 |
|                         | llion)]{.underline}** | tal]{.underline}** |
+-------------------------+-----------------------+--------------------+
| **Federal:**            | \$276.0               | 50.0%              |
|                         |                       |                    |
| Section 5309 New Starts | \$111.7               | 20.2%              |
|                         |                       |                    |
| STIP Funds\*            |                       |                    |
+-------------------------+-----------------------+--------------------+
| **State:**              | \$11.0                | 2.0%               |
|                         |                       |                    |
| Traffic Congestion      |                       |                    |
| Relief Program          |                       |                    |
+-------------------------+-----------------------+--------------------+
| **Local:**              | \$148.9               | 27.0%              |
|                         |                       |                    |
| LACMTA Sales Tax        | \$4.5                 | 0.8%               |
| Revenues                |                       |                    |
|                         |                       |                    |
| LACMTA Lease Revenue    |                       |                    |
+-------------------------+-----------------------+--------------------+
| **Total:**              | **\$552.1**           | 100.0%             |
+-------------------------+-----------------------+--------------------+

**NOTE**: The financial plan reflected in this table has been developed
by the project sponsor and does not reflect a commitment by DOT or FTA.
The sum of the figures may differ from the total as listed due to
rounding.

\*STIP funds are state-administered Federal flexible funds augmented by
state gas tax and other revenues. These funds are passed from the state
to local transportation agencies as STIP funds, but all Federal
requirements apply.

# *Capital Finance Plan Rating: Medium-High* 

The capital finance plan is rated *Medium-High*, based upon the average
of the ratings assigned to each of the subfactors listed below. The
commitment of funds received a *High* rating; capital condition and
completeness were rated *Medium-High*; and the remaining two subfactors
were rated *Medium*.

#### Agency Capital Condition: Medium-High

-   The average age of LACMTA's bus fleet is 4.2 years, which is
    significantly younger than the industry average.

-   The agency's good bond ratings, which were issued in 2003, are:
    Moody's Aa3; Standard & Poor's AA-; and Fitch A+.

#### Completeness of Capital Plan: Medium-High

-   The submittal was complete. It contained all required elements
    including a 20-year cash flow statement, identification of key
    assumptions, fleet management plans and other supporting
    documentation, and more than five years of historical data. The plan
    included a limited sensitivity analysis that examined the effect of
    changes in passenger fares.

#### 

#### 

#### 

#### Commitment of Capital Funds: High

-   Approximately 89 percent of non-New Starts funding is committed. The
    committed funds include Traffic Congestion Relief Program funds,
    State Transportation Improvement Program (STIP) funds, and
    Proposition A and C tax revenues which are totally under the control
    of LACMTA.

#### Capital Funding Capacity: Medium

-   The project's financial plan shows projected cash balances, reserve
    accounts, and/or access to credit that would allow LACMTA to cover
    cost increases or funding shortfalls equal to approximately 25
    percent of project costs.

#### Capital Cost Estimate and Planning Assumptions: Medium

### Key assumptions regarding sales tax revenue growth, inflation rates, and receipt of Federal funds are consistent with historical trends. 

#### *Operating Finance Plan Rating: Medium-High*

The operating finance plan is rated *Medium-High*, based upon the
average of the ratings assigned to each of the five subfactors listed
below. The operating condition and commitment of funds subfactors
received *High* ratings, while the remainder of the subfactors received
*Medium* ratings.

#### Agency Operating Condition: High

-   LACMTA is in excellent financial condition. There have been no cash
    flow shortages in the operating plan in the last five years. From FY
    1997 to FY 2003, LACMTA steadily increased its service, adding 23
    percent more revenue hours.

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-   LACMTA's current ratio of assets to liabilities as reported in its
    most recent audited financial statement is 3.6.

#### Completeness of Operating Plan: Medium

-   The operating plan is reasonably detailed for the LACMTA system as a
    whole, but lacks some detail regarding the project's specific
    operating costs and fare revenue estimates.

#### Commitment of Operating Funds: High

-   Over 75 percent of operating funding is committed. Operating funds
    include passenger revenues, Proposition A and C sales tax revenues,
    State Transportation Development Act funds, and FTA Section 5307
    Formula funds (used for preventative maintenance).

#### Operating Funding Capacity: Medium

-   The project's financial plan shows projected cash balances, reserve
    accounts, and/or access to credit exceeding 12 percent of annual
    operating expenses.

#### Operating Cost Estimates and Planning Assumptions: Medium

-   Forecasts of key components of the operating plan (operating costs,
    passenger revenues, sales tax and other revenues) are reasonable in
    comparison to historical trends.

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