Author Topic: Method for Bond-Funding Bike Roads  (Read 2611 times)

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Offline nomad

Method for Bond-Funding Bike Roads
« on: March 14, 2012, 02:13:34 pm »
The problem with funding bike roads seems to be that no one wants to build them purely for the goodness of doing so, which is the best reason imo.  However, it seems like municipal bonds could be used to get funding if there was some source of revenue planned to repay the bond.  Could it be organized so that each, say, 20-mile stretch of bike road along a planned route could be funded by businesses that would start up as "rest stops" at the end of the 20 miles?  So, for example, if you were a business investor who wanted to set up a restaurant, truck-stop type facility, campground, etc., you could agree to a certain level of sales-tax until the bonds for the road-work had been paid off.  That way, each 20-mile stretch could be planned and funded in itself and there would be travel-oriented facilities along the route.  I think 20 miles is a distance that is short enough to promote traveling with children, who are the main people in need of separated bike roads anyway.  What do you think?  Would people be willing to invest in such bonds and businesses along the routes?  Or aren't there enough families with children willing to travel in this way to make it pay off?

Offline Patco

Re: Method for Bond-Funding Bike Roads
« Reply #1 on: March 14, 2012, 02:50:03 pm »
An out-of-the box idea, but I am not able to envision any scenario that would allow this to pencil out. It is difficult enough to have our current roads repaired and maintained, and there is a steady supply of excise taxes. The cost for such an endeavor - land acquisition, legal, construction, maintenance, interest costs on the bonds (a risky venture would require a high interest rate), along with the cash flow that would be required for a bond sinking fund to ensure the bonds could be repaid, would likely overwhelm any expected revenues that could be generated.

indyfabz

  • Guest
Re: Method for Bond-Funding Bike Roads
« Reply #2 on: March 14, 2012, 04:14:02 pm »
An out-of-the box idea, but I am not able to envision any scenario that would allow this to pencil out. It is difficult enough to have our current roads repaired and maintained, and there is a steady supply of excise taxes. The cost for such an endeavor - land acquisition, legal, construction, maintenance, interest costs on the bonds (a risky venture would require a high interest rate), along with the cash flow that would be required for a bond sinking fund to ensure the bonds could be repaid, would likely overwhelm any expected revenues that could be generated.

+1.

Imagine the land acquisition costs alone. One 20 mile "bike road" a mere 8' wide would require 844,800 sq. feet, or 19.4 acres. In reality, you would probably want something at least twice as wide. How would the land be acquired? Eminent domain?  If so, that could raise a host of legal and political issues and add to the acquisition cost. Even when a right of way in donated by, say, a railroad for use as a trail, development and construction can be a costly and lengthy affair.

Of course, there and some bike trails that see enough useage that they generate commercial benefits to existing business and in some cases actually result in new businesses. But I seriously doubt that model would work in most (or even many) places. Seasonality is one reason. Such roads in many parts of the country would be sparingly used, if at all, for many months out of the year due to weather conditions. Population density is another reason.

Offline nomad

Re: Method for Bond-Funding Bike Roads
« Reply #3 on: March 15, 2012, 10:42:40 am »
The catch-22 of bicycle infrastructure is that the costs of building it and maintaining it are designed to pay wages at levels that afford the contributing workers and investors cars, gas, and the lifestyle that comes with it.  Ironically, I think if the economy was reduced to desperation because gas was up to unaffordable levels, bike infrastructure and businesses serving it would grow to high demand.  I guess it's just a question of waiting until the ongoing economic 'catastrophe' reaches that point, but it would be nice if there was a way to figure out what would make such projects doable before they are critically needed. 

The comment about current roads being undermaintained reflects a common attitude that bicycle infrastructure is an extra privilege that can only be legitimated if the 'essentials' are taken care of first.  But if you think about it, all a bike road really is is an extra lane on an existing road that is separated from the road by the maximum amount of unpaved green space possible.  I think if people would see that, it would become clear that adding a bike lane is a far better investment in a future economy where gas prices continue to rise, making it that much more difficult for families and individuals to travel recreationally. 

I was just thinking that if the bonds were available for investment, people might put some of their money into that instead of rising oil futures.  Maybe it's a pie-in-the-sky alternative to more drilling and wars for oil, but I don't see why it shouldn't be part of an "all of the above" approach to energy/infrastructure policy.  Thanks for the critical-thinking; it certainly is a challenging prospect.