Commuter rail remains a key component of the project. In fact, it’s still something of the impetus of the proposed rail expansion in two, 25-mile phases — the first from downtown Charlotte to southern Mooresville, the second extending to just north of I-40 in Statesville and the Lowe’s Home Improvement distribution facility. But the process of getting the Red Line off its death bed and nursed toward relevance required a transfusion of new blood in the form of an emphasis on the economic development potential of the corridor and an expansion of the region’s freight capacity.
The latter dovetails with the NCDOT’s high interest in making North Carolina a key player in global logistics, all of which can serve to attract more of the economic redevelopment along the corridor, which, in theory, can spin off enough extra property tax revenue to pay for half of the project.
Commuter transit and freight work together because commuter transit requires heavier rail and features greater distances between the stops. Unlike light rail, commuter rail uses diesel engines and Amtrack-like passenger cars. The two uses would not occupy the line at the same time.
Paul Morris, the new deputy secretary of transit of the North Carolina Department of Transportation, continued his series of briefings on the work of the Red Line Task Force to local officials last Wednesday, meeting with members of the Red Line Task Force at Huntersville Town Hall. He told them some of the world’s top companies that rely on logistics are looking to the Southeast, and that he and North Carolina Transportation Secretary Gene Conti are among those who want to see the state — and specifically this region — lead the way.
“This is truly innovative, that the North Carolina Department of Transportation is looking at this from a business approach as opposed to a capacity approach,” Morris said last week. “This project is not the same as it was a year ago. It doesn’t have the same name. The name doesn’t have the word ‘commuter’ in it for a purpose. ... Companies that engage in global logistics have had their eyes on the region, which is not in a competitive position because the state has not made it a priority.
“North Carolina has started the discussion about how the state can position itself for global enterprise. ... Bringing freight into the equation and making it a dual partner is a concept that is now at the forefront of the project.”
Among the buzzwords that have been associated with the dual benefit of transit and rail are “value capture.” But before that value can be captured — most likely in the form of tax increment financing or special assessment districts — in order to retire any public and/or private investment in the corridor, provide for additional municipal expenses in servicing new development and, eventually, returning a revenue to local coffers in for form of additional property tax dollars, that value must first be created.
The recommendation forthcoming from the Red Line Task Force — a subcommittee of the Metropolitan Transit Commission (MTC), which oversees the Charlotte Area Transit System (CATS) — will be to establish a joint powers authority (JPA) from among all seven jurisdictions that the first phase of the Red Line will encompass, sort of a limited government whose powers will be limited to what it is granted by those partners.
Those sorts of structures always set off alarm bells among local governments, Morris admitted, but they’re not uncommon across the country, having been utilized in the Northeast, Midwest and Southwest for dozens of multi-jurisdictional transit and transportation projects. On a smaller scale, the partnership of Cornelius, Huntersville, Davidson and Mecklenburg County in the Commerce Station industrial park in southern Huntersville is one form of a multi-jurisdictional partnership.
“It does create anxiety around loss of control,” Morris said of a JPA. “So, it requires transparency and openness, so the JPA does nothing to undermine the local controls each jurisdiction has and must maintain. To assure that, you’re also establishing certain prohibitions at the same time.”
The JPA would work with the project from the first construction contract let to debt retirement, at which time it could either cease to exist or be extended, provided that 100 percent of the participating jurisdictions agree. Exactly what form a JPA would take would depend on agreement of all the local governments — not simply a majority of them — a process that is expected to occur over the next nine months. Morris told the LNTC, as he has others in the past, that it will require all the jurisdictions’ approval, or nothing happens at all.
The stakes are high because of the potential financial exposure. Of the roughly $400 million project, NCDOT is committed to 25 percent and CATS another 25 percent. That means some $200 million must be spun off new property taxes and other development fees from private investment that would be drawn to the new freight/passenger corridor. The likely scenario is
private investment that would have to be repaid over time from the additional tax revenues, or value “captured” from redevelopment or new development on what is largely raw land.
That $200 million, plus any additional surface street work that may be required to service the new development as well as access to the stations, has been a point of concern to some local government officials. Morris said a certain amount of infrastructure improvement around the new development is in the planning stages and would be included in any final plan. He said should development come as expected, there will be plenty to repay the investment.
“Transportation infrastructure investment is the most significant land use decision we make,” said Morris. “Every region lives and dies on its mobility, and most developers want to go where the transit or the rail infrastructure will suit them best. You get to guide them where you want them if you make the right decisions. This project is migrating toward this path and provides an opportunity to establish that value and ultimately capture the value you created.
“You create the value, and then you capture it.”
That value, Morris said, is estimated at some $4 billion in redevelopment between downtown Charlotte and Mooresville over the next 25 years. That development includes high-density residential, commercial, industrial and freight capacity, the latter in the form of “freight villages,” shared facilities among a number of users that require convenient freight access.
“There are Fortune 500 companies around the word that are looking at the Southeast, and will not site anywhere without rail access,” said Morris. “We also have to make sure (the Red Line) will work as a transit facility. It has to be a much more carefully tuned relationship between a rail operation for freight and a rail operation for passengers and transit.”
Red Line whistle stop
The next stop for the Red Line is at the Wednesday, Oct. 26, Red Line Task Force meeting at 4 p.m. in the Charlotte-Mecklenburg Government Center in downtown Charlotte. At that meeting, the group’s consultants will lay out options for the structure of a joint powers authority. The next day, there will be a public briefing on the proposal at the Central Piedmont Community College North Campus from 10 a.m. to noon.
On Wednesday, Nov. 16, the Red Line Task Force will receive a preliminary draft of the project business plan; and on Tuesday, Dec. 13, the Red Line Task Force will hold a summit on the project in Mooresville at the Charles Mack Citizen Center. Finally, on Wednesday, Dec. 14, the Red Line Task Force will vote on whether to recommend the revised draft of the project business plan to the Metropolitan Transit Commission.
