As scheduled, local discussions about the proposed business and finance plan for the Red Line Regional Rail Project have begun, and the race to reach consensus among seven jurisdictions and two agencies by June 30 is on.
It began officially this past Wednesday evening at Cornelius Town Hall, with the first convening of the town's own Red Line Task Force, a six-member panel made up of commissioners Dave Gilroy and Jeff Hare, and four prominent residents. Their task will be to examine the details of the proposal, even as it continues to be refined, and eventually make a recommendation to the Cornelius Town Board regarding formal endorsement of the proposal.
In order for the Red Line to begin construction in 2013, under the current proposal crafted by the Red Line Task Force of the Metropolitan Transit Commission, it will require unanimous endorsement of all jurisdictions along the 25-mile Phase I from downtown Charlotte to Mount Mourne, along with that of the Charlotte Area Transit System and the State of North Carolina. The latter two would fund 25 percent each of the capital cost of $452 million.
The other "agencies," the towns of Huntersville, Cornelius, Davidson and Mooresville, along with the City of Charlotte and Mecklenburg and Iredell counties, must also unanimously agree to create a joint power authority (JPA) to govern, operate and maintain the commuter and freight line. In addition, they must establish special assessment districts (SAD) and tax increment financing (TIF) models to extract revenues from a united benefits district (UBD) to pay for the local share of $226 million in capital costs, ongoing operation and maintenance costs, and infrastructure support projects around the development areas.
Consultants to the project wowed supporters a few weeks ago when they presented financial figures generated by potential private investment firms that projected a $1 billion windfall in SAD and TIF revenues over 30 years as a result of new development along the corridor. Skeptics quickly responded that they heard similar rosy projections about new development along the LYNX Blue Line commuter rail from downtown Charlotte to near Pineville, but much of that has yet to materialize.
And proponents have also run into a potential early roadblock in Iredell County, where the chairman of the county commission has already voiced early opposition to the project. The county may not necessarily have to participate in Phase I, but it would have to allow the Town of Mooresville to establish TIF districts and collect tax revenues. North Carolina Deputy Secretary of Transit Paul Morris has repeatedly stated, however, that anything short of unanimous approval of all jurisdictions along the UBD would kill the project.
Few comments
Now that the Red Line process has turned from the plan proposal to the official discussion and refinement phase, local jurisdictions have about 90 days to meet with citizens, property owners, experts and each other to discuss the details, then another 90 days to draft a consensus business and financing plan, if they are so inclined.
The Citizen sent a series of questions to all commissioners in Cornelius, Huntersville and Davidson and, as expected, received few replies this early in the process.
But three commissioners, Charles Jeter of Huntersville, Chuck Travis of Cornelius and Rodney Graham of Davidson, did express some thoughts about the current state of the process.
Says Jeter, "At this point, we have heard broad strokes about how financing may occur, but as with most things, the devil is in the details. There are many questions that have to be answered regarding how certain scenarios play out."
Among those details, Jeter is concerned about the project generating enough revenue to adequately address infrastructure needs of the towns to serve the station areas and new development. He doesn't believe the $452 million capital budget, which includes some money for road improvements relative to the rail, is adequate.
"There is a great deal of road construction that will need to take place to make these facilities accessible," says Jeter. "I do not believe the current funding mechanism currently captures all of those costs. As a result, my concern is that these required transportation/road improvements would fall to the Huntersville taxpayer. This issue must be fully resolved prior to Huntersville's participation."
Travis echoes Jeter's concerns over the impact of the Red Line on his town's infrastructure, and the costs needed to upgrade it.
"We need a complete understanding of infrastructure costs that will be required to support development along the Red Line," says Travis. "As a commissioner and serving on the Lake Norman Transportation Commission, we have been discussing the infrastructure needs in Cornelius over the last two years, and I am not convinced we have a true understanding of what will be required for street improvements, parking requirements, etc., as well as costs."
An architect by trade, Travis says he is designing two apartment developments along the Blue Line, which have been reduced in scope from their original concept as a result of current economic conditions. He worries that anticipated development along the Red Line, albeit different in nature from the more urban setting of the Blue Line, might not, in the end, be enough to pay for the Red Line.
"We need to be realistic in anticipated development projections along the Red Line," says Travis.
In their presentations to date, members of the Red Line Task Force and their consultants have repeatedly stated that there will be no financial recourse to the towns and counties along the corridor, and that the private investment in the project would assume all the risk. The state would serve as a backstop in the event of a revenue shortfall to repay the investment, which would come in the form of short-term loans to investors until revenues are sufficient.
"I don't know what happens if there is a perpetual shortfall in revenues," says freshman Davidson Commissioner Rodney Graham. "The financial success of the Red Line is predicated upon significant new growth, both commercial and residential."
Which, says Graham, if it happens will have an impact on Davidson, which fights vigorously to maintain its small-town feel. Proponents of the land use/infrastructure relationship say the growth is coming regardless, and that the Red Line provides an opportunity to shift that growth east of I-77, refocus "Main Street" as the center of the towns and to better manage the anticipated population influx through high-density development along the rail. Davidson, in many respects, already has that.
"Our challenge is retaining our small town characteristics as our community and the surrounding communities grow significantly," says Graham.
That's a challenge unique to Davidson. Travis says one of the key challenges will be how each jurisdiction along the UBD manages — or doesn't — to integrate its unique issues with the overall, 25-mile-line district that is intended to provide long-term tax revenues from new development that might not otherwise come, according to proponents. What's good for one town isn't necessarily so for the next.
"Individual towns will have unique conditions that will need to be solved," says Travis. "Cornelius will need to address access issues, impact on the historic character of our town center and the effect passenger and freight rail will have on future development patterns."
Task force meetings
The Cornelius Rail Task Force has two more meetings scheduled. They are set for 6 p.m. on Tuesday, Jan. 10, and Thursday, Jan. 26. Both meetings will be held at Cornelius Town Hall, Room 204. The task force is comprised of commissioners Dave Gilroy and Jeff Hare, former mayors Wes Southern and Gary Knox, and developers Jeff Wakeman and Joe Roy. Assistant Town Manager Andrew Grant is serving as staff liaison.
