Modern Day Belles

Is public transportation an efficient way to move people, a method for decreasing greenhouse gases or a form of street art? For TIG/m Modern Street Railways, the answer is yes to all three. The Chatsworth company makes 25-ton trolley cars that are powered by hydrogen fuel cells, feature ornate designs reminiscent of turn-of-the-century streetcars and cost well over $1 million. Currently, TIG/m is working on a four-car contract worth about $6 million with the government of Aruba. The Caribbean island has a goal to become the first 100-percent sustainable energy nation in the world. The trolley cars take cruise ship passengers from the port town to the boutique stores and colorful Dutch architecture in the capital city of Oranjestad. While Aruban authorities could have purchased a bus or shuttle from many companies, they wanted to give tourists a memorable ride to town – and that’s where TIG/m differs from the competition. Prior to starting TIG/m in 2005, co-founder Alvaro Villa worked at the Imagineering subsidiary of Burbank-based Walt Disney Co., where he helped design and install animatronics for 20,000 Leagues Under the Sea and other attractions at Walt Disney World. Brad Read, the other co-founder, has a background in amusement parks as well. He was director of engineering at Transportation Innovators Group, a Canyon Lake company which designed and built vehicles for theme park rides. “This is what we found working in the entertainment industry: We know that in order to make any kind of transit system or ride system successful, it has to be a complete attraction unto itself,” Read said. “So we put that kind of attractiveness into transit vehicles.” The company builds the motor and other machinery on site, and the décor is either custom made or refurbished from antique cars. That means the plant has woodworking, welding and machining equipment, with employees that have specialized training. The finished product features wooden benches, vintage steering controls and plenty of brass poles and railings. But is any street car really worth $1 million? Before the arrival of the trolley in Aruba in December, Oranjestad was experiencing a decline in retail spending and many shops were relocating to the port town where tourist dollars were more abundant. Fredric Every, chief of staff to Oslin Sevinger, the minister of Infrastructure and Environment in Aruba, said that since the debut of the car, many building owners are upgrading their buildings, plans for a new five-star hotel is in the works and international chain stores such as XOXO and Mango are now opening rather than closing. “The trolley that is currently being used has been a success amongst the tourists and the locals,” Every said. “It proves that one trolley alone is not sufficient and the remaining three pending delivery are highly called for.” Retro growth Before TIG/m began doing business internationally, it landed its first contract to build a retro-style streetcar in 2002 for the Grove shopping center in Los Angeles. Matt Simon, the Grove’s senior general manager, said the shopping center’s aim is to offer guests a one-of-a-kind experience and the complimentary trolley ride provides that. “For over 10 years our guests have absolutely loved it,” Simon said. “It adds a level of charisma and excitement for families and children visiting the property.” Another system currently in the works is for a mixed-use development by Polo Square Partners LLC in Indio. The air-conditioned trolley will take passengers from their condos, parking garage or hotel to retail stores on the property. “The older generation, baby boomers, and retirees that want to have a place in Coachella Valley can come and use the trolley so they don’t have walk,” said William Swank, chairman of Polo Square Partners. TIG/m’s biggest clients have come from overseas, including mixed use developments in Mexico, the Caribbean and the Middle East. After it installed a streetcar system for Emaar Properties PJSC in Dubai, other United Arab Emirates governments came knocking. The company has since designed and built streetcar systems that serve passengers in Qatar and a project in Sharjah is in the works. “This industry has a lot of potential. It’s a way to improve transportation in a clean way,” Villa said. TIG/m does have competition. The Aruba streetcar contract initially went to a Dutch transportation company, HTM. In the end, HTM did the track design but not the cars because its European tram vehicle didn’t convey the image of a tourist-driven island. And Gomaco Trolley Co., of Ida Grove, Iowa, is a manufacturer of vintage battery powered streetcars. The company competed for but did not get the Aruba contract, Read said. Revenue at TIG/m grew 300 percent between 2011 and 2012, and co-founders expect another 100 percent increase between 2012 and 2013. The company declined to release dollar amounts. The company has no outside investors and has financed its growth internally. Read said clients also share the capital burden by paying 20 percent of a car’s price upfront. Meanwhile, the company has outgrown its 9175 Deering Ave. facility, which has drafting and engineering offices as well as a manufacturing facility. It is moving into a location across the street that will be twice the size. The company also plans to expand the workforce from 15 to about 25. “Business is growing enormously,” Read said. Domestic niche The company sees opportunities in the U.S. as well. TIG/m is seeking to raise money from strategic investors and equity partners to build a prototype for a modern streetcar that it hopes will run in downtown Los Angeles and other U.S. cities in the near future. In December, Los Angeles voters approved a plan to revive the streetcar system downtown, though no choice has been made on a supplier. John Boesel, chief executive of Calstart, a clean transportation trade group in Pasadena, said there is a growing demand for green trolleys in Southern California, which had a large trolley system in the 1920s until it was dismantled in the 1950s. “People want to see the L.A. rail system come back,” Boesel said. “Internationally, there is a growing need for solutions like this to help reduce congestion and reduce emissions within urban landscapes.” But while TIG/m, with an expensive product, has been able to serve a niche market with is pricey cars, Boesel said it could have a hard time breaking into cash-strapped municipalities, though they are beneficial. “Trolley systems help support growth in cities. Businesses near trolley stops tend to stick around,” he said. “Once businesses in communities understand that, they become big supporters of the trolleys.” What’s more, remnants of trolley systems remain in U.S. cities. Villa believes his company can bring those systems to life in an eco-friendly way while contributing to urban renewal and economic development. “Many cities still have them and many cities in Europe still use them. The big advantage we have is we don’t need the overhead wires, making it a lot more attractive,” he said.