City Streets: Investing in a Neglected Asset

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7 THE VITAL ROLE OF STREETS IN ECONOMIC DEVELOPMENT "The relationship between transportation and economic development provides just another example that transportation investment is always a means to a greater goal and not simply an end in itself. " -Transportation Research Circular, Transportation Research Board. May 2003 The city ofAlbany convinced Pepsi-Co to site a plant in town by funding $9 million dollars worth of street improvements, including the construction of new streets, and the construction of a railroad overpass. The Pepsi-Co plant will bring family- wagejobs to the area-the city expects as many as 500 new jobs-and growth in property tax value of $500 million. Without the transportation infrastructure, Pepsi- Cowould have chosen one of the out-of--state locations it was also considering. STREET PRESERVATION -THE COST-EFFECTIVE APPROACH Cities are the engine of economic development in Oregon, and provide many vital services including police and fire protection, water, sewer, parks and library services, and the construction and maintenance of the local transportation infrastructure. Despite the fact that streets are an integral part of daily life, streets and roads are often the unnoticed service provided by state and local governments. Unless there is a pothole, or traffic due to road construction (i.e. when the road system is not working) the level of resources required to maintain local transportation systems is not obvious to the road user. Nonetheless, investments in municipal road assets provide enormous economic return. Streets, roads, and highways literally keep the state's economy moving. The Portland Metro Area's economy is "transportation dependent, especially on its roads and highways, for the movement of freight "' In fact, 60 percent of jobs statewide are transportation dependent z Transportation and logistics are 20 to 25 percent of today's production costs.3 For industries that transport goods, the condition of the road infrastructure is a key factor in deciding where to locate an office, warehouse, or production plant. As an example of the role key streets play in economic development, the Ronler Acres development in Hillsboro (the headquarters for Intel) was preceded by a city investment of $7.56 million on street infrastructure alone. This large investment of public funds increased property tax revenue from $38,5 million to over $610 million, created 6,000 jobs at Intel (and many other ancillary jobs locally), and helped pave the way for more high-tech companies in Oregon. Computers and electronics are now the state's number one export a Although new street infrastructure was needed to recruit Intel, adequate maintenance and preservation is needed to retain them. Intel has already been forced to move its shipment deadline two hours earlier in the day to ensure that its goods can move through Portland to the airport on times The city of John Day and Grant County, in an effort to turn around local job losses, collaborated to develop the infrastructure for a local industrial park. The city and county spent a total of $3.5 million, of which $1.2 million was invested inroads. Projections for job growth in the park were three to four jobs per acre. However, the first two industries that have located in the industrial park have already exceeded this projection, with 32 employees on their three acres, representing a 1.5 percent increase in total county employment. One of these employers had planned to move their 14 jobs out of the area, but was persuaded to stayby the improved transportation infrastructure, and now plans to add new employees. For Grant County and the city of John Day, an investment in the road infrastructure was the critical ingredient in retaining jobs and attracting the development. of new industries. City Streets: Investing in a Neglected Asset -Page 2 "Pavement preservation is a planned system of treating pavements to maximize their useful life. " - A Pocket Guide to Asphalt Pavement Preservation. Federal Highway Administration One dollar invested in street preservation can save up to five dollars on future reconstruction costs. Planned maintenance and preservation is the most cost- effective way to maintain Oregon's street and highway system, but it requires an up-front and sustained investment. When starting with a newly constructed street, there are typical trends in deterioration that can be predicted, identified, and controlled using a preservation and management plan. Pavement preservation is not for streets in poor condition- . those streets must be reconstructed. Various factors, such as traffic and weather, cause the preliminary breakdown of the pavement surface. The first sign of surface breakdown is the appearance of cracks. Cracks allow moisture to seep down under the surface to the street's foundation, causing more damage to the street structure. The next stage of deterioration is a system of "alligator cracks." This is a critical point in the life-cycle of pavement because the street foundation is beginning to collapse. In high traffic areas, the deterioration can progress more quickly at this stage. Eventually, alligator cracks turn into potholes, thereby signaling that the surface has failed. If a city street has gone through the whole life-cycle without any preventive measures, the only action that can be taken is the management of immediate issues, such as pothole repairs, and eventually conducting an expensive reconstruction of the roadway. Pavement Deterioration ALLIGATOR CRACKS occu when cracks spread and become interconnected ......_...... ,~~ ~,, ~ ` ~.-~: ~, ` ; r POTHOLES are the final stage of pavement deterioration, indicating that theroad subsurface has failed City Streets: Investing in a Neglected Asset -Page 3 CRACKS damage pavement by allowing water to penetrate into the subsurface