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Rail advocates tout regionalism in economic talks (VIDEO)

Thursday's dddd. (Map courtesy of WisDOT)

Business leaders and politicians gathered Thursday to talk about the economic possibilities -- or lack thereof -- of regional high-speed rail in Wisconsin. (Map courtesy of WisDOT)

By Caley Clinton

Business leaders and politicians engaged in a heated debate Thursday on the economic development potential of high-speed rail.

While supporters of the more than $800 million plan to build high-speed rail service in Wisconsin touted the benefits of regional accessibility, opponents such as state Sen. Ted Kanavas, R-Brookfield, questioned the likelihood of increased development near rail hubs.

The debate was part of a lunchtime meeting of the Wisconsin Innovation Network, a membership arm of Wisconsin’s nonprofit Tech Council.

“There will be a couple of businesses that benefit from this,” Kanavas said. “But ultimately, if this is about development around the stations, we’ve got a problem.”

The high-speed rail line from Madison to Milwaukee is part of the more than $800 million in money marked for Wisconsin.

The proposed high-speed rail line from Madison to Milwaukee is part of a larger regional system that will run from Chicago to Minneapolis.

Kanavas was part of a three-member panel that discussed the practicality and economic development potential of the rail proposal.

Panelist Teresa Esser, a principal at Capital Midwest Fund LP, Milwaukee, said she couldn’t “care less about a couple of restaurants around the station.”

“This is about the region,” she said. “It’s about the number of hours it takes for people to get from place to place. There’s a lot of money in Chicago. It’s about making it easier and faster to get that money here.”

The proposed high-speed rail line between Milwaukee and Madison is part of a larger system intended to link Minneapolis to Chicago.

“This is a regional thing, not a Milwaukee-to-Madison thing,” said Trevor D’Souza, managing director at Mason Wells Inc., Milwaukee, who attended Thursday’s meeting. “If we want to be a great region, we need to have decent transportation. The end game is the Twin Cities.”

Esser said the potential for economic development will be found in the increased opportunities people have with the ease of a well-connected high-speed rail system.

FOR THE LATEST HIGH-SPEED RAIL NEWS, PHOTOS, VIDEOS AND MORE, VISIT THE DAILY REPORTER’S PROJECT PROFILE PAGE

“Everyone should have the opportunity to get to Chicago,” she said. “This will open a lot more markets.”

But economist Larry Kaufmann is unconvinced. Kaufmann, who was not at Thursday’s meeting but weighed in on the plan’s economic development potential beforehand, said a fair amount of research shows that development does not result from rail.

“Development is just redistributed,” he said, “not created.”

Dane County Supervisor Eileen Bruskewitz agreed, calling any development resulting from regional transit “contrived.”

“Mass transit should take people where they want to go,” she said, “not where we tell them to go.”

Bruskewitz said the large amount of money planned for the system is not worth the potential for development.

“Building a train line is not going to build business,” she said. “This is pie-eyed thinking.”

But panel member Paul Eberle, chief executive of Whyte Hirschboeck Dudek SC, Milwaukee, said opponents of the high-speed rail project need to look at the big picture.

“Development around the stations is insignificant,” he said. “But connecting people regionally is important.”

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8 comments

  1. Why these people convened to waste time and energy discussing an already-approved and under-construction project is anyone’s guess, but Eileen Bruskewitz and Larry Kaufmann are both connected to the shadowy extremist CATO Foundation and its various arms tied into men like Wendell Cox, Tom Rubin and Randal O’Toole, all professional Big Oil/Bigger Roads-funded torpedos.

    That’s probably why Bruskewitz and Kaufmann, who should know better and probably secretly do, are trying to defuse the huge impact of transit-oriented development (TOD).

    In Minneapolis, nearby the Hi-Lake Shopping Center it developed in Minneapolis, Wellington Management Inc. has preliminary plans to break ground next spring on a mixed-use project that calls for about 55 apartments and 8,500 square feet of retail space. In St. Paul, where the developer is based, Wellington completed the Metro Lofts mixed-used development in 2006. And immediately behind the Metro Lofts is Emerald Gardens, a 212-condominium development the company built in 2005.

    What all three projects have in common, says Judd Fenlon, Wellington director of real estate development, is their proximity to existing or planned light-rail train routes.

    Fenlon spoke at a recent panel discussion hosted by the Minnesota Shopping Center Association on how transportation projects and federal stimulus spending are creating commercial real estate opportunities in the Twin Cities. He said the anticipated start of major construction this summer for the Central Corridor light rail line — from downtown Minneapolis to downtown St. Paul via University Avenue — is a prime example of where Wellington is looking to undertake more development.

    Wellington’s proposed five-story building at the Hi-Lake’s vacant triangle property would have one floor of retail and four stories of rental housing. The project is contingent on gaining various city approvals, and Fenlon said the Hi-Lake center is where Wellington “cut its teeth on these light-rail (related) developments.”

    His company bought the 125,000-square-foot center in 2004 for about $6 million and since then has invested about $3 million in the property. Today, the center is about 60 percent occupied, he said.

    This is TOD in action. Both St. Paul projects were built in anticipation of the Central Corridor light rail project, said Joanne Henry, a spokeswoman for Wellington Management.

    Fenlon said Wellington also plans to build a project just west of the Metro Lofts that would have about 80,000 square feet of office space and 20,000 square feet for retail, including a grocery store. No groundbreaking date has been set, but Fenlon said he anticipates the project — called 2700 University Avenue — will get under way before the $957 million central corridor line is expected to open in 2014.

    “We are working hard on financing” for 2700 University Avenue, Fenlon said.
    Karen Lyons, a senior planner at the Metropolitan Council who also spoke during the panel discussion, said a wealth of other development is expected along light rail corridors. That includes another 9,000 housing units “waiting in the wings” near Hiawatha Avenue train stations and 11,500 units built or in construction along the Central Corridor with another 7,850 proposed, Lyons said.

    Check these “experts” and their statements carefully, including what I said as well.

  2. Ms. Jefferies:

    I would be most appreciative if you could put me in contact with those “Big Oil/Bigger Roads” entities that are funding me, as they are all evidently sending the checks to the wrong address.

    I would be most gratified if you would cease and desist from commenting on matters that you obviously have no knowledge of, such as such as the sources of my income.

    As to the “shadowy” CATO Foundation, here is something that you evidently were unaware of – the URL of their web site:

    http://www.cato.org/

    As to how “extremist” CATO may be, I suggest that a valid approach to determining this might be to review papers prepared by Randall O’Toole (who is affiliated with CATO, which I am not) and attempt to find factual inaccuracies or logical inconsistencies.

    Getting back to myself, I have over 35 years in the transit industry, working for well over 100 transit agencies and other public sector transportation organizations – including, most likely, working on far more rail projects than you have ridden on. For many years, my main interest has been in seeing that taxpayer resources allocated to transit are used wisely, particularly in consideration of those whose transportation options are limited.

    The KRM proposal would require $250 million in construction costs, plus over $8 million a year in taxpayer operating subsidies, to add 4,800 one-way transit trips per day.

    From 2000 to 2007, the Milwaukee County Transit System lost over 86,000 daily riders.

    My objection is to using $25 in scarce taxpayer transit funding to each one-way KRM trip when those lost MCTS riders could resume using transit for $2 each in taxpayer funding – and the MCTS riders have far fewer transportation options.

    And, by the way, I believe that the KRM cost estimates are understated and I find the ridership projections questionable and inconsistent with the KRM operating plan.

    As to the influence of rail transit lines on real estate development, at best, rail transit has some ability to move certain new projects from place to place in a community, but has shown very little ability to create development that would have not existed without the rail line. It is actually very difficult to even determine how much influence rail transit has on location of development along rail lines as, very frequently, there are other significant public sector influences at work, such as long-term significant real estate tax abatements, favorable zoning and floor-area-ratio bonuses, and other direct monetary and other factors.

    For those who are interested in my paper on KRM, here is the link:

    http://reason.org/news/show/kenosha-racine-milwaukee-corri

  3. Tom Rubin uses an interesting comparison of statistics to make his point that the KRM is not worth it.

    He states the following:

    “And the $2.1 billion increase in property values the rail project alleges would mean that each of the 3,696 projected 2035 round-trip riders would be “worth” $568,000, a claim that “cannot be taken seriously” the Reason Foundation concludes.”

    Let’s compare annual riders to property values that are generally depreciated in excess of 30 years. Dividing that $568,000 by 30 years, then, gives us a value of $18.9 thousand dollars per rider. Though I fail to see the point of his comparison, I do submit it’s a 30 year number not an annual, and thus it is an irrelevancy given the history of this urban corridor.

    Let’s look at the Rubin challenge from the point of view of the car, for which we have decades of statistics:

    Take the property values along the I-94 corridor between Milwaukee and the Illinois line as a basis. Examine the increase in those values, and divide by that increase by the number of passengers cars carried on that stretch of highway over a period of about 40 years. What you would find, I predict, is that the obvious lack of property appreciation along a highway (except for a mall in Kenosha County) would give a very low return for the billions invested in building that highway way back, and then rebuilding it again every 25 years or so.

    Rubin is complaining about 1/4 of one billion? But his numbers hang in mid-air waiting for apt comparisons to the improved property values incident to highway developments.

    Lots of passengers ride that road, but the continuing development is not near the road but east of the road in those urban areas that were once built up with intelligent public transportation, including a fast electric commuter train. Even while that train is gone, its footprint continues to compete for development against cars for which we have paid dearly in highway construction.

  4. What isn’t being discussed is the integration of high speed rail into a feeder and distribution system. Taken as a whole, air, rail bus, cab, rental car, bike trail and pedestrian preferred right of ways will provide not only unlimited economic growth by quality of life issues that dwarf the cost of this part of the system.
    The long term development of high speed rail will bring a valuable increment to a system that will enable most people to go where they want to go, when they want to go, at low cost.

  5. And, that, Jeff, is the heart of a vibrant economy – the ability to transact for work or goods from a wide swath of customers and workers. Trains do this, efficiently. It is no wonder that, once installed and running, the demand for trains skyrockets in nearby neighborhoods. People see (and ride) and the conversation changes.

  6. Reason Foundation professes that it believes in competition and freedom, but by advocating against public transportation suggests RF is beholden to some corporate interests that thrive on a car culture.

    Selected Corporate Supporters (2000) (from SourceWatch)

    * 3M
    * American Forest & Paper Association
    * American Petroleum Institute
    * Bank of America
    * Bayer Corporation
    * California Association of Realtors
    * California Water Service Company
    * Ken and Colleen Butler, Capital Partnerships
    * Chevron Corporation
    * Coca-Cola Co.
    * Consulting Engineers & Land Surveyors of California
    * Council of New York State, Inc.
    * Continental Airlines
    * Corrections Corporation of America
    * DaimlerChrysler Corp.
    * Dart Container Corporation
    * Delta Air Lines
    * Dow Chemical USA
    * Eastman Chemical Company
    * Eberle & Associates, Inc.
    * Edison Electric Institute
    * ENRON
    * ExxonMobil Corporation
    * Ford Motor Company
    * Freedom Communications
    * General Motors Corporation
    * LCOR Incorporated
    * Lehman Brothers, Inc.
    * Eli Lilly and Co.
    * Microsoft Corporation
    * National Air Transportation Association
    * National Beer Wholesalers Association
    * Nossaman, Guthner, Knox & Elliott
    * Pfizer, Inc
    * Philip Morris Companies
    * PricewaterhouseCoopers
    * Privatized Emergency Services Association
    * Procter & Gamble
    * Shell Oil Co.
    * Southern California Water
    * Techcentralstation.com
    * Union Carbide Corporation
    * Virco
    * Wackenhut Corrections Co.
    * Watson Land Company
    * Western States Petroleum Association

  7. A little comparison makes it clear that Mr. Tom Rubin is using numbers to obscure again. I do note that the anti-rail types no longer dare to make the claims that ‘no one will ride it,’ because all of the rail lines have proved astonishingly popular. Now they are down to talking made-up economic comparisons… OK, let’s directly compare the expense of carrying a passenger one mile, using Federal Transit Administration numbers (http://www.ntdprogram.gov/ntdprogram/links.htm):

    Portland, OR: Bus – $1.00, Light Rail – $0.43
    San Diego, CA: Bus – $0.75, Light Rail – $0.27
    Sacramento, CA: Bus – $1.61, Light Rail – $0.60
    Dallas, TX: Bus – $1.28, Light Rail – $0.59
    Charlotte, NC: Bus – $0.85, Light Rail – $0.73
    St. Louis, MO: Bus – $0.93, Light Rail – $0.39
    Minneapolis, MN: Bus – $0.72, Light Rail – $0.39

    This can be affected by things like local labor agreements and operating conditions, of course, but the overall effect is that rail is far cheaper to operate than bus when they are even close to being handled in an equivalent fashion.

    The Minneapolis Hiawatha line replaced the local Route 55 bus on nearly the same route, and provides an excellent comparison in operating conditions similar to Milwaukee (where it costs $0.88 per passenger mile to run a bus). If all of the 61,059,220 yearly passenger miles handed by the light rail there were run by the “always cheaper” buses, that would cost Twin Cities tax payers an extra $20,149,542.60 per year, based on that 33-cent extra cost per passenger mile of running a bus. Forget all of the increased property values near the rail line and acres of extra downtown land not needed for parking this represents. Even forget the 29,000 trips this takes off of the area roads every day. On just that operating cost difference alone, the entire local cost of the Hiawatha Line will be paid off in 18.6 years – faster than most home mortgages. But no one will ride it? The rail line handled 10,221,681 unlinked passenger trips in 2008, all on one 12-mile line, running only in Minneapolis. With 27 rail vehicles, as opposed to the Twin Cities 884 buses.

    3% of the transit fleet carrying 12.5% of the passenger load for 9% of the budget? That’s why they are building another line, as have nearly all of the rail cities. If it isn’t wholly successful, why do cities that dare to build one line keep building more, and as fast as they can? Also, like so many of the other rail cities, the success has inspired a commuter rail line in Minneapolis, which has also been highly successful. If this compares to the newer commuter lines in Salt Lake City or Albuquerque, it will have about half of the per passenger mile expense of a Milwaukee city bus.

    Construction costs are one time only; operating costs go on forever. The oil and concrete crowd wants you to keep paying through the nose.

  8. Randal O’Toole’s so-called “Thoreau Institute” is funded by oil, asphalt and pipeline money. The man is paid to lead his jihad against all rail transit, funded by Big Business and far-right sources and depending upon continuing emotional appeals to angry blue-collar types like the Tea Partiers who are not apt to dig deep into the primary funding sources of O’Toole’s outfit to see where he’s coming from.

    (The offensive term “useful idiots” is what insiders call the blind followers who are all too willing to shout and picket on behalf of candidates, issues and/or political movements without bothering to look behind the curtain.)

    According to Media Transparency’s research, O’Toole’s Thoreau Institute is based in Oak Grove, Oregon, and received major grants totalling $321,100 between 1997-2005. Here’s a tabulation of the organization’s main funding sources in that period.

    12/31/2005
    $50,000
    Sarah Scaife Foundation

    01/01/2002
    $50,000
    Sarah Scaife Foundation

    01/01/2002
    $10,000
    Charlotte and Walter Kohler
    Charitable Trust

    01/01/2001
    $50,000
    Sarah Scaife Foundation

    01/01/1999
    $50,000
    Sarah Scaife Foundation

    01/01/1999
    $10,000
    Charlotte and Walter Kohler Charitable Trust

    01/01/1998
    $50,000
    Charles G. Koch Charitable Foundation

    11/11/1997
    $22,550
    The Lynde and Harry Bradley Foundation, Inc.

    08/11/1997
    $22,550
    The Lynde and Harry Bradley Foundation, Inc.

    04/07/1997
    $3,000
    The Lynde and Harry Bradley Foundation, Inc.

    04/07/1997
    $3,000
    The Lynde and Harry Bradley Foundation, Inc.

    Media Transparency provided information on three out of the four donors. (No information was available on the Kohler Charitable Trust.):

    The Sarah Mellon Scaife Foundation is “a foundation financed by the Mellon industrial, oil and banking fortune”, according to Media Transparency. At one time, its largest single holding was stock in Gulf Oil Corporation. it was estimated some years ago to be a $200 million foundation. it became active in supporting conservative causes in 1973, when Richard Mellon Scaife became chairman. Since then, Scaife has been a leading financier of New Right causes.
    ========
    The Charles G. Koch Foundation is deeply rooted in the petroleum and petrochemical industries.

    According to Media Transparency,
    David and Charles Koch, sons of the ultraconservative founder of Koch industries, Fred Koch, direct the three Koch family foundations: the Charles G. Koch Foundation, the David H. Koch Charitable Foundation, and the Claude R. Lambe Charitable Foundation. David and Charles control Koch industries, the second-largest privately owned company and the largest privately owned energy company in the nation; they have a combined net worth of approximately $4 billion, placing them among the top 50 wealthiest individuals in the country and among the top 100 wealthiest individuals in the world in 2003, according to Forbes.
    ==========
    Koch industries, Inc. has primarily been involved in petroleum and chemicals. its website boasts that “Koch companies have been involved in the petroleum business since 1940, growing refining capacity more than 80-fold in six decades. Today, the Flint Hills Resources group of businesses, subsidiaries of Koch industries, are engaged in petroleum refining, chemicals and lube oil production, crude oil supply and trading, and wholesale marketing and trading of fuel oil, base oils, gasoline, petrochemicals, chemical intermediates, asphalt and other products. A subsidiary of Koch Supply & Trading also produces jet fuel, gas oil, naphtha and residual fuel in Europe. As a result of Flint Hills Resources’ various interests in production facilities in the petroleum chain, the company has expanded its marketing capability regularly to create value for customers. An example of that expansion is the 2003 entry into the base lube oil business following the purchase of a half-interest in Louisiana- based Excel Paralubes. The lube oil business is a natural extension of Flint Hills Resources, and has introduced it to a new customer base. The company’s products are used in motor oil, agriculture oils and marine oils, among others.”

    in 2005, Flint Hills Resources began operating a system of strategically located asphalt terminals, formerly owned by Koch Materials Company, to market product from the Minnesota refinery. This refinery’s production of asphalt sparked Koch companies’ 1979 entry into asphalt marketing.

    Koch further emphasizes its roots in the oil. gas, and chemical pipeline industry: “As part of a 1946 refining acquisition, Koch industries’ predecessor company acquired a small crude oil pipeline system in southwestern Oklahoma. Over the years, Koch companies have bought or built and sold pipeline systems transporting crude oil and refined products, as well as natural gas, natural gas liquids and anhydrous ammonia. Today, Koch Pipeline Company, L.P. owns and operates pipelines carrying crude oil, refined products and natural gas liquids.

    Major donors to Randal O’Toole’s anti-rail campaign stand to gain from continuing overwhelming dependency on motor vehicle mobility, and from sprawl development which reinforces that dependency. Through its involvement in asphalt production, Koch industries profited from highway construction, such as the huge Marquette Interchange in Milwaukee, which was largely paid for by state taxpayers.

    Media Transparency said this about the Koch family’s political ideology and “charitable” investment policies:

    “Following in the footsteps of their father, a member of the John Birch Society, the Kochs clearly have an ultra-conservative bent. Charles Koch founded the Cato Institute, and David Koch co-founded Citizens for a Sound Economy (CSE) [now FreedomWorks], where he serves as chairman of the board of directors. David also serves on the board of the Cato Institute. The Koch foundations make substantial annual contributions to these organizations (more than $12 million to each between 1985 and 2002) as well as to other influential conservative think tanks, advocacy groups, media organizations, academic institutes and legal organizations, thus participating in every level of the policy process. Their total conservative policy giving exceeded $20 million between 1999 and 2001. David Koch even ran for president as the Libertarian Party candidate in 1980. The brothers’ orientation comes as no surprise, given their ownership of Koch industries, an oil and gas corporation.”
    ==========
    About the Lynde and Harry Bradley Foundation, Inc., Media Transparency said “With $516 million in assets (2004), the Lynde and Harry Bradley Foundation of Milwaukee, Wisconsin is the country’s largest and most influential right-wing foundation.” As of the end of 2004 it was giving away more than $33 million a year. Its financial resources, its clear political agenda, and its extensive national network of contacts and collaborators in political, academic and media circles has allowed it to exert an important influence on key issues of public policy. While its targets range from Affirmative Action to Social Security, it has seen its greatest successes in the areas of welfare “reform” and attempts to privatize public education through the promotion of school vouchers.

    More than three years ago, the article “Exposing Those Far-Right Propaganda ‘Think Tanks’” pointed out, “Throughout the USA, public transportation is virtually under siege” – calling attention to “a veritable barrage of misinformation, directed especially against rail transit services and proposals, coming from so-called ‘think tanks’ with warm and fuzzy ‘heartland’-style or ‘academic’-redolent names….
    Despite their ‘grassroots’ pretenses, these groups’ high intensity of pricey activities belie heavily endowed bank accounts: a steady stream of ’surveys’, supposedly erudite research projects and reports, cash channelled into local anti-transit efforts, and visits by national ‘hired gun’ transit assassins like Wendell Cox and Randal O’Toole.”

    Gradually, more and more information is coming to light and dots are being connected. And what’s becoming clearer and clearer is that the efforts to roadblock the development of rail transit such as the long-promised (thirty years!) KRM Line are directly linked to powerful, extremely wealthy interest groups that stand to profit substantially from thwarting rail transit and other major public transport investments and from maintaining dependency on private motor vehicle transport and suburban sprawl land development patterns in perpetuity.

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