Taxpayers could end up paying an extra half-billion dollars to build a streetcar connecting Brooklyn and Queens under current financing plans, according to a watch dog group's estimate.
In February, Mayor Bill de Blasio announced plans for a 16-mile streetcar, known as the Brooklyn-Queens Connector, or the BQX, which would run from Sunset Park along Brooklyn’s industrial waterfront to Astoria, in Queens. Typically, the city would pay for an infrastructure project this big by issuing a municipal bond, which requires the government to pay off the debt, plus interest, over a certain time period. But to fund the tram line, the mayor will likely create a nonprofit development corporation that will float the bonds instead, according to a recent article in Gotham Gazette.
Funding the entire project using that arrangement could add an estimated $400 million to $500 million in interest to the total cost over a 40-year period, according to the Citizens Budget Commission. The commission came up with its estimate by looking at 2011 bonds issued for the Hudson Yards project, which used a similar financing setup to the one proposed for the streetcar. Mayor Bill de Blasio has pegged the cost of the streetcar's construction at $2.5 billion, though that figure does not include interest payments.