How Stimulus Spending Ruined Buffalo — Lessons for Honolulu

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BYRecently Steven Manlanga of the Manhattan Institute authored “How Stimulus Spending Ruined Buffalo” in the Wall Street Journal. It describes that stimulus was the vehicle for ruining Buffalo, New York and at the core of this stimulus was none other but a light rail system:

  • In his State of the State Address this month, New York Gov. Andrew Cuomo announced $1 billion in incentives to attract new investment. Too bad Mr. Cuomo ignores the factors that help keep areas like Buffalo inhospitable to new investment—namely steep tax rates and the high cost of government.
  • Sometimes these schemes have done real harm. In the 1970s, the federal government decided to invest $530 million to build a 6.2-mile light-rail system through downtown Buffalo. It was supposed to further spur redevelopment.
  • Opened in 1985 and anchored by a transit mall that banned cars, the rail line fell well below ridership projections—and downtown businesses suffered mightily from the lack of traffic. As Buffalo landlord Stephen P. Fitzmaurice wrote in 2009: “Walk down Main Street on the transit mall; aside from a few necessities like drug and cell phone stores, blight dominates.” Last month the city received a $15 million federal grant to restore traffic to Main Street.
  • These massive investment subsidies failed partly because officials were ill-suited to select the right projects and often instead gave money to favored insiders. Even former Mayor Anthony Masiello described the federal government’s redevelopment funds as “a politically motivated system trying to please everybody.”
  • Image: Main Street in Buffalo: Emptied of traffic and stores by a light-rail infrastructure stimulus project in the 1980s.

Lesson 1: Factors that help keep areas like Honolulu inhospitable to new investment—namely steep tax rates and the high cost of government.


Lesson 2: Rail systems are planned as reasons to spur development. They do not. Quite the opposite they produce blight which cost even more money to reverse.

Lesson 3: Yet another rail line where projected rail ridership was a myth ( a lie.)

Lesson 4: Clueless politicians (i.e., Former Honolulu Mayor Mufi Hannemann, Current Honolulu Mayor Peter Carlisle, and Hannemann’s managing director Kirk Caldwell, now a candidate for mayor) and appointed boards (HART) are “ill-suited to select the right projects and often instead gave money to favored insiders” (Mr. Malanga refers to pay-to-play politics which are prominent in Hawaii.)





  1. The cities Mr. Prevedouros wants Honolulu to model itself after are places like Tuscaloosa Alabama and Biloxi Mississippi or any jerkwater town in Idaho.

    Or Honolulu could choose a different direction and model itself after: San Francisco, London, or New York. The contrast is stark in every aspect of the lifestyle. Mr. Prevedouros and Sam Slom and the rest of the Tea Party like the Alabama model. Some of us prefer the San Francisco approach. As far as rail is concerned, the voters have already chosen.

    • Rail has its place and Honolulu is not it.

      Some people like “hotdogdaddy” do not seem to understand simple things like:
      1) Honolulu does not have the taxpaying base to support a multibillion dollar anything… H-3 freeway was $1.6 Billion, but 80% of it was Federal funds. Feds will pay at most 25% of the rail’s rock bottom estimate of $5.3 Billion cost.
      2) Honolulu does not have “traffic chokers” like bridges and tunnels. The stupidity of the H-1/H-2 and Middle St. merges can be mitigated, but not with rail.
      3) Both San Fran and NYC are closer to bankruptcy than Honolulu. As soon as we get rail we will be far closer to bankruptcy than them. Are you aware of the “NY City style” potholes and the homeless issue in San Fran?

      The proposed rail will suck six billion dollars out of the local economy and offer very little for it. (It already is scheduled to suck $1.4 Billion and send them to Italy!) It will be six billion dollar LESS for trash, sewers, water mains and roads. The choice is obvious. And so is stupidity.

      • I admire and appreciate your willingness to respond to me. But back to the question: which of the world’s great cities do you think Honolulu should seek to emulate?

      • Jack,

        I was asked a similar question when I was a candidate for mayor. “Who is a mayor I admire or I would like to emulate?” In this case, fellow civil engineer and infrastructure-focused Honolulu mayor Johnny Wilson comes close.

        Cities are vastly different among each other but if you insist then I would pick Singapore which I have referred to in several related opinions. In Singapore politics are “tight” and business practices and cost-effectiveness predominate in planning and infrastructure decisions. Honolulu’s politics are liberal, its government is full of duplication and waste, and our project selection principles are almost the antithesis of cost-effectiveness.


  2. Dear Jack,

    I ride the Chicago Transit, the DC Metro and NYC Subway systems when on about ten visits each year. They are all heavily used and increasingly run-down, even the famed (and newest of the bunch) DC Metro. All suck in huge amounts of tax dollars each year, and in the METRO’s case, this is despite fares that are based on time-of-day and distances traveled. Every time I get on the Blue Line at O’Hare bound for the Loop, I silently thank the taxpayers for chipping in $15+ dollars to subsidize my $2.25 fare. And then, I keep my wits about me, because while all these systems are “safe,” they all attract plenty of crime — because that’s where it’s easy to pull-off scams and other crimes. (Oh, yeah, and don’t forget that Mufi and Peter’s choo-choo budget doesn’t provide for transit police….

    The insoluble problem is whatever the true costs, both capital and operating, of the rail system, as well as that it fails to serve THE venue most needing service, namely UH-Manoa. Some don’t like how it will look, and while I respect their concerns, I think that’s trivial by comparison to a project that will vacuum-in every available dollar. Would rail offer some benefits? Of course, those who (now and eventually) live and work on the rail line would benefit enormously. Almost everyone who lives elsewhere will glean little of no benefit. Unfortunately everyone else will be perpetually paying for the benefit that these relatively folks get — and H-1 corridor vehicular traffic will remain a horror-show. There are numerous other options, all cheaper — and most offering greater flexibility for a city our size.

    If the train could somehow be built for free and the necessary operating supplement only a couple hundred million dollars per year, I’d be supporting it. Instead, it’s no where near free — and it seems as if our leaders cheery estimates of ridership were cooked.


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