Bay Trolley Line Set to Roll in ’89 : City Hotel-Motel Tax Funds Will Cover Construction Costs

City hotel-motel tax funds will be used to finance a downtown trolley line along San Diego Bay under an agreement approved by regional transit directors Thursday.

Unlike the South and East trolley lines, which have depended on state and federal funds supplemented by fare revenues, the newest extension to the trolley system will be built with borrowed city funds and expected contributions from adjacent property owners, transit officials said Thursday.

The 1.3-mile Bayside line will run south down Kettner Boulevard from the Santa Fe Depot to Pacific Highway, then southeast along the Santa Fe Railroad tracks past Seaport Village, the Hotel Inter-Continental and the city convention center site. The new line will link with existing trolley lines to the east and south at 12th Avenue and L Street. The link will also form a downtown loop by connecting at both ends with the current trolley route along 12th Avenue and C Street.

Under an agreement approved without discussion Thursday by the Metropolitan Transit Development Board, the city is committing $4.2 million and pledging to finance other portions of the estimated $25 million planning and construction costs “by bond proceeds, pledged from future Public Transportation Reserve funds, scheduled for sale in mid-1987.”

Jack Limber, MTDB counsel, said that, since the tax was raised from 6% to 7%, the San Diego City Council has been setting aside a portion of each year’s transient occupancy tax collected by hotels and motels. No official action has been taken yet by city officials on the bond issue or on committing additional funds to the Bayside line, he said, but no other funding sources for construction have been identified.

San Diego Councilman Ed Struiksma, an MTDB director, said that talks about financing contributions are under way with the San Diego Unified Port District, the Navy and major property owners along the route. He added that “the city manager has determined it would be feasible to issue bonds based on future transient occupancy tax revenues.”

Struiksma said that city officials are “looking to the Port District as a major contributor” to the financing of the Bayside line.

MTDB engineering director Rick Thorpe said the transit agency is negotiating with a Los Angeles-based engineering firm on an $850,000 contract for final designs of the bayside project. Construction could begin late this year, he said, and the line is expected to open in 1989 to coincide with the debut of the city convention center.

Thorpe said the transit agency, which will supervise construction and will operate the new line, will not have to acquire right-of-way for the tracks. The route will operate entirely on city streets (Kettner and L) and on Santa Fe and MTDB right-of-way.

The costs of the Bayside line will include purchase of five additional trolley cars costing more than $1 million each.

Thorpe said that financing for the Bayside line, will not depend on the outcome of a November ballot measure to impose a countywide half-cent sales tax to fund local road and transit improvements.