As transportation infrastructure planning by the government goes, the proposed Red Line is rolling along at bullet train speed. Seemingly derailed just a little more than a year ago after more than a decade of preliminary work, interest at the state level in a project broader than simply commuter rail has put the planning back on track with a comprehensive proposal due by the end of the year.
With a meeting of the Red Line Task Force in Charlotte last Wednesday and Thursday's public meeting at Central Piedmont Community College North Campus, progress toward a final recommendation to be discussed among local governments is accelerating.
At last Wednesday's Red Line Task Force meeting, state-appointed consulting firm KKH Consulting released its fourth policy memorandum on the project — now called the Red Line Regional Rail Project — providing a comprehensive definition of a joint powers authority (JPA) and how a regional sub-government can be structured to achieve the objective of building and operating the Red Line, while limiting it to just that function.
While still a relatively new concept in the United States, there are examples of JPAs from the nation's capital area to California, each unique in its scope and structure. The policy memorandum highlighted a few examples, but stressed to Task Force representatives that, while a structure will be recommended by KKH in cooperation with North Carolina Deputy Director of Transit Paul Morris, it will be up to the nine agencies along the corridor to iron out the details.
"Our goal is to get more specific with the details when we deliver our final piece of the year, which is the draft business and finance plan, which will be released in draft form to the Red Line Task Force on Nov. 30," says Katherine Henderson of KKH Consulting. That meeting was originally scheduled for Nov. 16, but was postponed because Charlotte Mayor Anthony Foxx was scheduled to be out of town, but wanted to be present to receive the document. That's significant in that a buy-in by Charlotte was necessary to refocus attention on the Red Line.
The Metropolitan Transit Commission (MTC), of which the Red Line Task Force is a subcommittee, is by and large controlled by the clout wielded by Charlotte and the southern Mecklenburg towns. The MTC directs the Charlotte Area Transit System (CATS) in operational and capital decisions.
In the political process that accompanies transit planning, the MTC and CATS favored the Blue Line Light Rail extension from downtown Charlotte to University City even as the Lake Norman Transportation Commission (LNTC) was attempting to focus attention on the transit needs of this region. It wasn't until the LNTC brought in an Urban Land Institute panel — paid for by the three north Meck towns, Mooresville, Charlotte, Mecklenburg County and private contributions — revealed the Red Line rail corridor carried with it significant economic development potential, including in north Charlotte, that it got the city's, and ultimately the state's, attention.
North Carolina Transportation Secretary Gene Conti recognized the economic development potential, which dovetailed with the state's renewed interest in expanding the capacity of freight infrastructure. Conti hired Morris, at the state's expense, as a consultant to the Red Line Task Force before eventually appointing him second-in-command in Raleigh in September.
Coalition building
Reviving the Red Line, which local governments began planning in the mid-1990s in the form of transit-oriented development zoning along the existing Norfolk Southern Railroad corridor — Huntersville's Bryton and Cornelius' Antiquity developments are two examples of the results of that effort — required an unconventional approach.
Ridership standards for federal passenger rail funding favor light rail over commuter rail, the latter resembling more traditional passenger trains with diesel engines and fewer stops. That meant, with no federal grant money available, funding for the Red Line and its $400-plus million price tag for track upfitting, stations and rolling stock would have to come from elsewhere.
The current capital funding formula for the Red Line is 25 percent from the state, 25 percent from CATS and 50 percent generated by captured enhanced property tax value along the corridor in the form of tax increment financing, special assessment districts or other property tax revenues above and beyond current levels of undeveloped or underdeveloped land along the corridor. But the jurisdictions along the corridor don't have the $200 million to invest and then await redevelopment to pay them back. Thus, the "P3" (public-private partnership) concept was introduced to the process.
A P3 can take many forms, but generally includes private investment in the corridor, which is paid back over time from the enhanced tax values the new infrastructure generates. The thinking is 300 undeveloped acres brings little property tax revenue, but those same 300 acres fully developed because of the rail corridor will bring many times more. After that money repays the investors, the enhanced property tax value then belongs to the coalition of jurisdictions in perpetuity.
Because it's a new concept, Morris has admitted in the past that selling local government officials on the idea of value capture is a lengthy educational process. Henderson says that process has now begun in earnest.
"The role of us as a consulting team is to engage all stakeholders in conversation," says Henderson. "We have done that and we continue to do that. Iredell County staff has been involved, and we are hoping to get their commissioners involved as well. They have been attending meetings and we have been taking more of an informational approach with them at this time."
Iredell County is critical in the Red Line moving forward because, in order for the state to take a lead role, especially for bonding purposes, the project must cross county lines. Also, the second phase of the now 50-mile Red Line Regional Rail Project will go from the northern terminus of Phase I in Mount Mourne up to Interstate 40 in northern Iredell. That's Conti's ultimate goal: to facilitate greater freight movement along the same tracks that will be used for commuter rail and freight in the southern half of the project, and to appeal to international companies that are eyeing the Southeast United States as a key player in the future of global freight logistics.
Morris has frequently echoed the state's ambition to create a rail project that not only provides a local alternative to I-77 commuters and facilitates economic development in the region, but one that also provides freight movement for new industry and for "freight villages," that, where sensible, can serve as locations for shipping centers for multiple companies.
But all of that requires the unanimous participation of — from south to north — Mecklenburg County, Charlotte, CATS, Huntersville, Cornelius, Davidson, Iredell County and Mooresville as well as the State of North Carolina. If all those "agencies" cannot come to terms in the creation of the joint powers authority to implement and operate the corridor, the plan fails. And while there will be a recommended model for the structure of a JPA available by end of the year, the details, if it is created at all, will ultimately be debated and determined by the local governments. And they must all buy in. And if they do in the prescribed timeline, actual construction could begin as early as January 2013.
What has concerned local elected officials most while all this planning continues is the exposure the towns may have in repaying the investment should the economic development — and, thus, the value to capture — not evolve as anticipated. Morris has attempted to assure officials that the types of companies that invest in infrastructure projects simply won't do so if that is a potential danger and that, in all likelihood, the private investors will be the ones taking the risk. What is required of the cities, towns and counties is a willingness to allow the additional property tax revenues generated by any accompanying redevelopment to first repay the investors.
All of those details, Henderson says, will be spelled out in the consultant's Nov. 30 presentation to the Red Line Task Force.
"We will cover that in the business financing plan and they will see the answers they're looking for in writing by the end of the month," says Henderson.
