In what could be a major blow to Anaheim’s planned streetcar system, federal officials are indicating that the project is a poor candidate for the federal funding program expected to pay for at least half of its construction costs, according to several sources with knowledge of the situation.

Supporters envision the streetcar as a vital addition to the city’s transportation infrastructure, connecting key destinations in the city, including Disneyland, the convention center, Platinum Triangle development and GardenWalk outdoor mall. They claim it would generate significant investment along the 3.2-mile route and provide a bigger boost in public transit ridership than an enhanced bus alternative.

But the project has also come under intense criticism for its nearly $320-million price tag – which tops an Orange County Transportation Authority survey as most expensive when compared to 11 systems proposed around the country — and because the preferred route would knock down a cluster of family-owned businesses.

Local officials are aiming to win funding for the project under the Federal Transit Authority’s (FTA) highly competitive New Starts program. But several sources say the FTA has given a cold reception for an expensive project that they say would primarily serve to ferry tourists to Disneyland.

Specifically, sources say Supervisor Shawn Nelson, during a trip to Washington DC, was told by FTA officials that the project wouldn’t be a good candidate for New Starts funds. Nelson took the trip while he was the chairman of the Transportation Authority Board of Directors last year, according to sources.

Nelson didn’t return a phone call seeking comment. But other sources have also confirmed that the FTA isn’t excited about the project.

Anaheim Mayor Tom Tait, a vocal opponent of the project and Transportation Authority board member, said he’s “heard the same thing” from Transportation Authority officials.

Meanwhile, the Transportation Authority’s current chairman, Jeffrey Lalloway, also a critic of the Anaheim project, said he wasn’t surprised, but stopped short of saying he’s been told that FTA officials don’t like the project.

“As with most of the board, the FTA probably has some skepticism about the Anaheim project,” Lalloway said.

FTA officials refused to comment specifically, saying in an emailed statement that Anaheim hasn’t yet submitted an application for New Starts funding and the agency “is not required” to evaluate and rate projects until later in the competitive process.

“Therefore, we cannot comment on whether or not the project would be a qualified candidate for federal funding,” the statement reads.

It’s unclear how local officials would plan on funding the project if the city’s bid for New Starts grant funding were to be rejected. City planning documents say they  expect New Starts to fund over $150 million of the project’s cost.

In addition to the apparently poor chance of winning FTA funding, the project also faces other hurdles that could prove insurmountable.

The project has stalled since Paul Durand — one of the owners of the businesses to be knocked down to make way for the streetcar — went public  with his concerns last year. City leaders responded by directing staff to find an alternative route that wouldn’t require the city to forcibly acquire and demolish the privately owned buildings.

Transportation Authority leaders have made it clear they aren’t excited about the prospect of infringing on private property rights. At the Feb. 23 board meeting, board Director Todd Spitzer told Anaheim’s public works director, Natalie Meeks, to “figure out” how to avoid taking Duran’s businesses.

“This board, the prior board, has been very clear — we’re not using eminent domain to wipe out a family business,” Spitzer said at the meeting.

But the alternative that city officials are reportedly studying, which would direct the streetcar down Disney Way, does not call for riders to be dropped off directly across from Disneyland’s main gates. If that were the case, the resulting drop in ridership would render the project infeasible, Meeks told Voice of OC in 2013.

“We need to get a station near the front gates, where the people are going, for this system to work,” Meeks said at a Transportation Authority board meeting that year.

However, Meeks has since changed her tune, telling the Orange County Register   in May last year that she hadn’t noticed any “fatal flaws” with the Disney Way route alternative.

City spokeswoman Ruth Ruiz didn’t return a Voice of OC phone call and email requesting an interview with Meeks for this article.

Also, several sources have expressed renewed doubts about the streetcar’s projected 4,200 daily riders since a Voice of OC article revealed that ridership projections for the city’s new transit hub, known as the Anaheim Regional Transportation Intermodal Center (ARTIC), fell drastically short of estimates.

“Obviously the actual ARTIC boarding numbers clearly show that the ridership projections for the streetcar are wildly inflated,” Tait said.

Said Lalloway: “When planning transportation projects you’ve got to be careful about relying on inflated projection numbers and instead rely on the viability of a project in its totality.”

Meanwhile, other board members have concerns about the technological incompatibility between Santa Ana’s planned streetcar system, which is farther along in the planning stages and estimated to be millions cheaper, and the Anaheim line. Local officials hope the two systems can one day connect.

“I do think the projects only make sense if they somehow relate to each other,” said Transportation Authority board member Michael Hennessey, who said he is undecided on the Anaheim project.

Please contact Adam Elmahrek directly at and follow him on Twitter: @adamelmahrek

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