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August 2011

Rail News: Passenger Rail

Central Florida business and community leaders can't wait for SunRail to arrive


By Angela Cotey, Associate Editor

On July 15, officials from the U.S. Department of Transportation, state of Florida, Orlando and area communities, and local businesses gathered at the site of a future Florida Hospital commuter-rail station. They congregated to participate in a Full Funding Grant Agreement (FFGA) signing ceremony for central Florida’s SunRail, which has been almost two decades in the making.

Why did officials choose the Florida Hospital location for the ceremony? One of central Florida’s largest employers, the hospital has been planning its expansion around the commuter-rail project. The plans call for constructing a new administrative building and retail shops next to the station site, and developing nearby land to include residential units and parks.

With a SunRail station — paid for by Florida Hospital — serving as the development’s centerpiece, hospital officials can encourage patients and employees to take the train to the medical center, which will make it easier for people to get to the campus and reduce the number of parking spaces needed at the facility.

“For every person that rides the train, that’s one less parking space we have to build, and we can take that money and instead use it to buy a surgical robot or an MRI machine or something that will benefit the community medically,” says Jody Barry, Florida Hospital’s administrative director of facilities development. “And, we can build a bigger development because more people can get to us.”

The hospital development plans are symbolic of the type of mixed-use, high-density growth that central Florida community planners hope SunRail will help spur. To accommodate anticipated population growth during the next several decades, such developments are a must.

So are new transportation options. The 61-mile commuter-rail line — which will connect downtown Orlando with Orange, Seminole, Volusia and Osceola counties — will provide commuters and tourists with an alternative to the jam-packed Interstate 4.

SunRail also could provide a boost to the state’s near-record high unemployment levels. Florida’s freight transportation network will benefit, too. The state soon will purchase the SunRail tracks from CSX Transportation, and the railroad plans to use the proceeds to upgrade freight-rail infrastructure throughout the state.

That’s not to say everyone in the central Florida region believes SunRail is a cure-all for the area’s congestion and unemployment woes. The project has its share of critics. Among their chief complaints: the project’s cost ($1.2 billion) is too high and ridership projections (4,300 daily) are too low to justify construction; the state is paying CSXT too much for the right of way ($432 million); local governments won’t be able to fund operations and maintenance; the project is a freight-rail relocation disguised as a publicly funded commuter-rail line; and central Florida residents weren’t given a chance to vote on SunRail.

Wheels in motion

But for the project’s opponents, it’s all over but the shouting. With an official green light given by Gov. Rick Scott on July 1, SunRail is coming to the Sunshine State. During the past month, the Florida Department of Transportation (FDOT) has set in motion a series of project elements that will set up SunRail for a fall groundbreaking and late 2013 opening. Meanwhile, Orlando-area communities and businesses are putting plans in place to build stations and new developments, promote SunRail as a transportation alternative and determine how they can make the best use of their soon-to-be newest asset. And that asset, they hope, will help central Florida maintain its standing as a top place to live, work and play.

The SunRail project, or some iteration of it, has been on the drawing board for 20 years, although the push to create new transportation options for central Florida has become an even bigger focus during the past decade.

“About 10 years ago, all of the counties and cities and business people got together and realized ... if we didn’t plan and grow smartly, we would not continue to enjoy the quality of life we have,” says Orlando Mayor Buddy Dyer, who also chairs the Central Florida Commuter Rail Commission Governing Board, which was established in 2007 to help FDOT plan the SunRail project. “We agreed that dense urban nodes of transit-oriented development were important toward our vision for what we wanted our community to look like and SunRail was the most important part of that.”

A rocky start

Planning for the project officially began about seven years ago, says Noranne Downs, District Five secretary for FDOT, which is overseeing SunRail construction and initial operations. But the project’s had its share of pitfalls.

Track owner CSXT initially opposed SunRail due to concerns over liability issues the commuter trains could pose once they began operating, as well as how the Class I would maintain freight operations and accommodate future growth. The state and railroad finally reached a tentative agreement that calls for FDOT to purchase the tracks from CSXT. The state also will accept liability for damages that could be caused in the event of a train accident and pay to upgrade another freight-rail line so CSXT can transfer traffic to it.

But a handful of state senators have expressed concern — outrage, even — about the terms of that agreement. The legislators have said the state is paying CSXT too much for the track, taking on too much liability and essentially paying the Class I to add freight capacity.

As a result of those objections — as well as concerns that the state couldn’t afford to build or operate the system — the state Legislature voted against a bill authorizing FDOT to advance SunRail twice — once in 2008 and again in 2009.

In late 2009, the Legislature finally approved the project during a special session that also included funding approval for the Tri-Rail commuter-rail system. Former Gov. Charlie Crist called the special session after U.S. Transportation Secretary Ray LaHood said if the Legislature didn’t support existing and proposed rail systems that could feed into a Tampa-Orlando high-speed rail system, the state could lose out on billions in high-speed stimulus funds.

In late 2010, FDOT submitted its application for a Full Funding Grant Agreement for SunRail’s first phase, a 31-mile segment between DeBary and Sand Lake Road in Orange County.

Held back

However, when Republican Gov. Scott took office just a month later, he rejected $2.4 billion in federal funds that had been awarded for the Tampa-Orlando high-speed line and placed SunRail contracts on hold until he could review the project’s financial implications on Florida taxpayers.

SunRail supporters and opponents alike assumed that Scott would cancel the SunRail project, as well, since the federal government had committed most of the construction funds needed for the high-speed rail project, and the remainder of the cost could have been covered by private-sector dollars. But on July 1, Scott announced SunRail was a go.

Why did Scott kill high-speed and not SunRail? It depends on who you ask. State Sen. Paula Dockery (R-Lakeland) was one of the biggest high-speed supporters and SunRail opponents. She believes Scott’s decision was political: The commuter-rail project was being pushed by high-ranking Republican elected officials; high-speed rail was being pushed by the Obama administration. Others, such as U.S. Rep. John Mica (R-Fla.), say SunRail had more local support and high-speed rail had stimulus-attached strings that would require quicker decision-making and put the state on the hook for more tax support than Scott was comfortable with.

Since Scott approved SunRail, FDOT officials haven’t wasted any time getting the project off the ground. On July 5, the department gave the green light to an Archer Western Contractors/RailWorks Corp. joint venture to begin final design and maintenance mobilization activities. On July 6, FDOT informed MotivePower Inc. it could begin designing and manufacturing SunRail locomotives. On July 12, FDOT signed operating agreements with Amtrak and Florida Central Railroad. Two days later, the agency directed Bombardier Transportation to begin designing and manufacturing coaches and cab cars.

On July 15, officials from FDOT and the Federal Transit Administration signed a $178.6 million FFGA for the initial SunRail segment, which will cover about half of the first phase’s $357.2 million cost. Then, on July 25, FDOT signed a dispatching agreement with CSXT.

Next up: acquiring the right of way from CSXT so construction on the SunRail project can begin in fall. The Class I currently owns the tracks that SunRail trains will operate on, known as the A Line, and plans to sell them to FDOT for $432 million. CSXT will continue to operate some freight trains on the corridor — mostly those that are bound for Orlando — during designated hours when commuter trains are not operating, says CSXT Resident Vice President-Florida Bob O’Malley. The railroad will transfer through-train traffic to what’s known as the S Line, a corridor that bypasses Orlando to the west.

CSXT will use $198 million of the funds it will receive from FDOT to improve capacity and increase operational efficiency on the S Line, namely by adding passing sidings and upgrading grade crossings, to accommodate increased freight traffic on the corridor. The Class I expects to shift about eight freight trains per day from the A to S line.

The state’s compensation to CSXT also includes a $150 million direct payment for the tracks, $52 million for other freight-rail capacity improvements throughout the state, $23 million to relocate operations from Orlando’s Taft Yard to a new Integrated Logistics Center in Winter Haven and $9 million for road improvements around the center to mitigate the impact on area communities.

Cost criticisms

Project opponents — Dockery chief among them — believe the state is overpaying CSXT for the right of way.

“The reason you use existing track is to save money, but it’s not cheaper when you fold in all the stuff CSX wants,” says Dockery, who represents Lakeland, a city located on the S Line that will have more freight trains running through its downtown once CSXT transfers operations.

But O’Malley says CSXT isn’t asking for too much. The amount FDOT is paying is based on two independent appraisals of the right of way conducted for the state. Plus, the railroad is reinvesting all $432 million in freight-rail infrastructure in the state of Florida, he says.

For its part, the state will accept liability for any accidents that happen on the SunRail tracks, even if it involves CSXT.

“If CSX had an accident … CSX would be responsible for their train and their employees, but the state would be responsible for any other damage,” says Dockery. “So the liability is transferred off them and onto the taxpayers, even if a commuter train is not involved.”

The liability transfer is a standard practice, says O’Malley.

“We actually have had a similar liability agreement in place in south Florida [with Tri-Rail] for 25-plus years, so it’s been accepted practice in Florida to have that type of liability agreement,” he says. “We also have a similar one with Amtrak and any place where commuter service operates on freight corridors.”

Mica, for one, believes the state received a good deal. The purchase price for 61 miles of track is close to what the state paid to build one interchange on I-4. And by owning the track, FDOT will receive an annual access fee and per-car charge from CSXT, which will operate freight service on the A Line during designated windows. In addition, transferring freight traffic from the A to S lines will benefit both CSXT and commuters, Mica believes.

“There’s a huge benefit to moving freight rail out of the congested urban corridor,” he says. “There are dozens of crossings, and trains are a mile long and travel at an average of 18 mph through the communities. This makes rail more competitive from a delivery time basis.”

FDOT’s Downs expects the state and CSXT to close on the corridor purchase in October. Then, SunRail construction can officially begin. The project’s first phase calls for adding double track, upgrading signals and crossings, and building 12 stations. FDOT officials hope to launch operations in late 2013, although under terms of the FFGA, they have until May 2014, says Downs.

Expanding their reach

According to FDOT’s preliminary ridership estimates, SunRail is projected to log 4,300 passenger trips per day on the initial segment, with ridership rising to 7,400 by 2030. Greater Orlando communities hope to attract some of those riders to their cities, and developers are plotting new residential and commercial spaces near stations.

For example, Winter Park is rebuilding its existing Amtrak station, which also will serve as a SunRail station. The facility is located in Winter Park’s “quaint” downtown, which already features restaurants, coffee shops, retail stores and a park near the train stop, says City Manager Randy Knight.

“Winter Park is a poster child for transit-oriented development,” he says. “So, instead of the stop helping development, it’s really the opposite. The surrounding neighborhood will help this train stop.”

In DeBary — the terminus of SunRail’s first phase — Mayor Bob Garcia is excited about the prospect of economic development the commuter-rail system could generate around the station; the land around it is wide open. Garcia plans to attract new businesses to the area by touting SunRail as a commuting option for employees. The city also plans to tie the system into its efforts to build trails and restore a bayou, so people from Orlando can take the train to Volusia County for recreational activities.

“This opens up a new way of building a community,” he says. “I think SunRail is going to add another asset to what we already have — our beaches, our trails, our roads. People that live in big cities want to be able to get to these places as easy as possible.”

Orlando officials are planning to expand the Central Florida Regional Transportation Authority’s free LYMMO circulator service, which will enable commuters to take SunRail into downtown Orlando, then connect to their final destination using LYMMO or the LYNX bus service, says Mayor Dyer.

Orlando-area businesses are planning ways they can help boost SunRail ridership, as well. In addition to Florida Hospital’s development plans, Walt Disney World Resort and SeaWorld will offer shuttle buses to transport employees from SunRail stations to their properties. Tupperware Brands Corp. also will establish a shuttle service for employees, as well as donate more than 10 acres for a station site. Rida Development Corp. will invest in transit-oriented development at downtown Orlando’s Central SunRail station. Orange Crown Holdings will do the same next to the city of Longwood’s SunRail station. Ustler Development Inc. will redevelop the old Amway Arena, a 68-acre site in downtown Orlando that’s near a future SunRail station. And Avatar Properties Inc. will work to develop an Osceola County industrial park, located near a proposed commuter-rail station.

The commitments made by area businesses and communities were a big factor in Gov. Scott’s decision to approve the SunRail project, says Jose Gonzalez, vice president of government affairs for Associated Industries of Florida, which advocates for the state’s business community.

Prior to making his final decision, Scott sent FDOT Secretary Ananth Prasad to meet with central Florida residents, businesses and officials to gauge their thoughts on the commuter-rail project. The parties overwhelmingly stated their continued support for SunRail, Prasad said in his July 1 remarks announcing the project’s approval. That support, combined with SunRail’s legislative approval, set it apart from the high-speed rail project, says Gonzalez, whose organization also pushed for the high-speed system.

“I think ultimately the difference came to the fact that SunRail has been vetted by the Legislature for a number of years, had been approved by the Legislature and had a lot of checks and balances that high-speed rail didn’t have,” he says. “And, there was tremendous buy-in for SunRail from the local governments. When the governor and officials at the DOT sat down to make a decision, I would speculate that all weighed heavily on them.”

But Scott and FDOT officials have made it clear they won’t be on the hook for any project cost overruns or SunRail operating and maintenance costs for the long haul. If construction costs exceed the budget, all funding partners — the state of Florida, city of Orlando and Volusia, Seminole, Orange and Osceola counties — each will pay up to 5 percent more for additional costs. The local funding partners will be responsible for any costs exceeding the 5 percent threshold.

Once SunRail is built, FDOT will cover operating and maintenance costs for seven years. After that, the responsibility will be turned over to the Central Florida Rail Commission, which will include representatives from Orlando and each county.

When that time comes, community residents served by SunRail will be in for a rude awakening, Dockery believes.

“Local governments have no funding source identified,” she says. “We’re cutting teachers, police, firemen — their budgets are busted. They’re shoving this project on their people, who don’t realize that, in seven years, they’ll be taxed to pay for it.”

That’s why Dockery plans to contact FDOT officials to start the conversation about how local governments will pay for the system. If there’s no plan in place, the state would have to cover costs despite Scott’s promises otherwise, she believes.

But local officials don’t seem too concerned about the operating and maintenance (O&M) cost responsibility. The new residential and commercial developments SunRail could spur, as well as businesses that could relocate to the area because of the commuter-rail line, will generate revenue. In addition, local governments are hopeful that a dedicated funding source can be identified in the coming years. Even if it’s not, SunRail won’t require a large subsidy, Dyer believes.

“The funding partner participation ... would be about 25 percent of the O&M, which would be a bit in excess of $7 million,” he says. “That ends up being less than about 1 percent of the combined budgets of the five local government funding partners, so it’s a fairly nominal amount.”

More rail planning in the works

As Orlando and other SunRail-served cities determine ways to cover the commuter-rail system’s eventual costs, and businesses and developers work to build up station areas, FDOT is beginning preliminary work on SunRail’s second phase. The line will be extended north to DeLand and south to Kissimmee and Poinciana. Environmental work has been completed for the entire 61-mile corridor. Now, FDOT needs to apply for a FFGA for the second phase of the project. Construction could begin by 2013, says Downs.

A SunRail sister system is in the works, too. In fall, FDOT plans to seek bids for a study to examine transportation options for an east-west connector that would link with Orlando International Airport, a large medical campus, International Drive and the Orange County Convention Center. Options to connect the north end of the SunRail corridor to Daytona Beach are being considered, as well.

Whether commuters in the car-congested Sunshine State will be enticed to get off the highway and onto a passenger train remains to be seen. With local government and business community buy-in, SunRail’s already has two big factors working in its favor. Florida Hospital’s Barry, for one, hopes commuters will catch on quickly. Like many other businesses, the hospital’s future development plans depend on it.

“I think SunRail will bring about a change in the culture,” he says. “I don’t have to get in my car. I can get on a train and get where I need to go, and it’s faster and less expensive. What we’re hoping to do is pass that culture on to our employees, and patients and visitors.”

E-mail comments to Angela Cotey, Associate Editor.


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