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Friday, April 09, 2010

Texas seeks private money for rail line

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With transportation funds running short at every level, regional planners for the North Central Texas Council of Governments are seeking permission to lead an unusual partnership with private investors so they can fast-track a 62-mile rail line known as the Cotton Belt corridor, The Dallas Morning News reports.

The plan, already supported by the two lead transit agencies in Dallas and Fort Worth, would use private money to build the rail line. And for the first time, the Regional Transportation Council would be put in charge of negotiating a contract outlining service levels, fares and other aspects of the new rail line.

DART and The T in Fort Worth would retain a veto over any final deal, and their staff members would sit in on the negotiations, explained Michael Morris, transportation director for the council of governments.

"From our point of view, we have an obligation to look out for all modes of transportation," Morris told the 43-member Regional Transportation Council on Thursday. "We've seen how innovative financing has helped us on the highway side, so our thought is, why not try to bring some of that same innovation to other modes and help our transit agencies develop rail lines as well."

The deal would be different than any of the private toll deals that have dominated discussions of highway financing for years. Instead of an advisory role, the RTC would be in charge of selecting the firms to partner with and would negotiate the financing details for the plan, which could involve about $1 billion. Morris said that if his approach is approved, the RTC could have a final deal to vote on, and to forward to the transit agencies, by the end of this year.

The council was poised to vote April 8, but Dallas County Commissioner Maurine Dickey and Collin County Commissioner Joe Jaynes asked for more time, and the 43-member RTC tabled the item for a month.

Tarrant County Judge Glen Whitley, the council's chairman, told Morris, however, to proceed with planning under the assumption that the council eventually will approve the idea.

Dallas City Council member Ron Natinsky urged colleagues to embrace the idea, and said he was ready to vote. "There is no downside here," he said. "This simply says we're going to solicit bids. Those bids have to be returned, and if they aren't to our liking, we can turn them down. And we're no worse off than we are now."

No matter who is in charge of negotiating the deal, a privately-financed rail line will represent a seismic shift in how passenger rail is built in Texas, just as Gov. Rick Perry's pursuit of privatized toll roads has transformed the way those roads are paid for. As with toll road deals, private partners who invest in rail lines would insist that every service decision - from ticket costs, to station locations, to schedules and parking fees - be examined with an eye on how much revenue they could produce.

Morris's approach would also be a rarity. DART knows of no other transit agency in the country that has opened a passenger rail line paid for by private investors, DART spokesman Morgan Lyons said. A public-private partnership in Denver is under way, but the transit agency has made big contributions of tax dollars to keep that project, already delayed and scaled back, moving forward.

The Cotton Belt plan, by contrast, would seek private investors to build the system without a penny from DART or The T.

The plan would most likely include much steeper fares for the Cotton Belt, paid parking, and the creation of special tax districts that would capture property tax increases associated with private development along the rail line.

Indeed, the Cotton Belt is "all about economic development," Dallas County Commissioner Mike Cantrell noted before the meeting.

It's long been seen as a transportation solution, too. But it has been low on DART's list of priorities. Distressed sales tax receipts has DART weighing which of its most important projects to delay, including how to complete the Orange Line to the airport by 2013 or building a second downtown Dallas rail line by 2016.

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