From their vantage point in the Rotunda meeting room atop Huntersville Town Center, members of the Red Line Task Force could catch a glimpse of the railroad tracks they hope one day will be the route a commuter train route between downtown Charlotte and Lake Norman.

From this symbol of a would-be renaissance of the old downtown district, one that could be in part fueled by commuter rail service, Charlotte officials who are rarely seen north of I-85 got down to the nitty-gritty of the if, when — and most importantly, how — the $360 million Red Line will be built.

With the cancellation of the July meeting of the Metropolitan Transit Commission, the monthly gathering of the Red Line Task Force, which regularly meets in advance of the MTC in Charlotte, was held locally. It gave some officials perhaps their first, first-hand look at what local officials have been pushing for for a long time.

And for the first time since a one-half-of-one-percent sales tax was pitched in the 1990s to build commuter and light rail service throughout the Charlotte Area Transit System (CATS) network, officials appear to be serious about the Red Line. By the end of this year, task force members were told by consultant Paul Morris of Greenleaf Strategies, a framework of local and state funding strategies will need to be in place for the Red Line to happen this decade.

“We now have the body of knowledge before us to move forward,” Morris told the panel, which is made up of representatives from the towns of Cornelius, Davidson, Mooresville and Huntersville, as well as those from CATS and the City of Charlotte. The meeting even drew a rare appearance by Charlotte Mayor Anthony Foxx, whose support for the Red Line is critical
given Charlotte’s political clout when it comes to all things regional transportation.

“I really want to see this project move forward in as aggressive of a schedule as we can to make it happen,” said Foxx.

If built, the Red Line Commuter Rail would extend from southern Mooresville just south of the Lowes corporate headquarters to the Gateway Station in downtown Charlotte, its 12 to 14 stops including one each in Mooresville, Davidson and Cornelius, and three in Huntersville.

Economic engine

The discussion over the merits of the commuter rail line has shifted from purely a transportation option to one of economic development. This in the wake of the Urban Land Institute panel of January 2010 suggesting a robust demand for development along the corridor, including freight capacity, which captured the attention of regional and state officials, reaching all the way to the office of North Carolina Transportation Secretary Gene Conti.

It was Conti who first hired and appointed rail transit expert Morris to the panel last year, demonstrating his level of interest in upgrading, and even expanding, the rail corridor all the way to Statesville, largely to increase the region’s freight capacity, which could play a key role in enhancing industrial growth along the corridor. Developers of mixed use projects have already been identified along the Red Line, but Morris says without the commuter service, that development will not reach it potential.

“Ultimately, what we are trying to do is capture this economic development,” he told the task force. “In many cases, if we don’t build this, it won’t come. It will come at some level, but not at the level it can without the project.”

Local municipalities will have to figure out how to address what Morris calls “gap funding,” the amount that falls between what state and CATS monies can be committed, and the balance of the project. That amount could be in the neighborhood of $120 million, depending on the project’s final cost. That figure could be affected by the level of participation of Norfolk & Southern Railroad. Officials would like to see the railroad forgive the $22 million lease fee it currently holds with CATS for use of the rail bed, and also help pay for the necessary upgrading of the tracks for passenger use as well as heavier freight use. In exchange, the railroad would draw more business from new industrial and logistics customers along the corridor, and could even be contracted to operate the entire corridor, including the transit component.

The tracks are currently used only about once per day or less.

Railroad participation notwithstanding, towns can’t meet that gap with new taxes, which is where the term “value capture” comes in. To close that funding gap, local jurisdictions can consider ongoing value capture mechanisms such as:

• tax increment financing (TIF), which leverages the future tax value of currently undeveloped property;

• special assessment districts (SAD), a tax overlay district applied strictly to redeveloped property along the corridor;

• land value tax, which takes into account land, buildings, improvement and proximity to redeveloped property; and

• transportation utility fees, a financing mechanism for transportation that treats the network as a utility and bills properties in proportion to their use, rather than their property tax value.

Also available for consideration are one-time funding sources such as joint development of property along the corridor between public and private sectors; development impact fees; negotiated exactions, which differ from impact fees in that they don’t follow a formula to determine the impact of a development; and air rights, the purchase of rights to use space above real estate. Morris said foreign investment in future development is also an option to cover the gap up front, providing mechanisms for repayment are demonstrated.

Sum of its parts

Which financing methods are used, Morris said, will depend on location, developer, political climate and other factors that may vary not only from one jurisdiction to the next, but on locations within the towns themselves. It will all require, he said, a cohesive approach by all five municipalities involved.

“This won’t work without a true collaboration, and this means suspending some of our parochial policies that tend to hone in and focus on local objectives and needs at the expense of the regional things we need to do at the same time,” he said.

That’s already begun to occur in some respects, specifically with the creation of the Lake Norman Transportation Commission, the four-town body that arguably played a key role in resurrecting the Red Line from life support by keeping the discussion front and center.

“Don’t you think we’re ahead of the game in that?” Huntersville Mayor Jill Swain asked Morris.

“I think you’ve come a long way,” answered Morris.

Progress notwithstanding, CATS Executive Director Carolyn Flowers warned that the political climate in Washington, D.C., can have a profound impact on the Red Line. Should federal spending cuts include formula funding for transit, CATS could neither budget capital for the construction nor the maintenance of the Red Line.

“The feds are talking about substantial cuts to transit, and one of those is formula funding, and the commuter rail ceiling is part of that funding,” she said. “I want everybody to be clear we will not be able to operate without formula funding. That covers our preventative maintenance that we are already getting, and our capital program we are getting to purchase our buses. If we have to prioritize, we have to protect what we already have in operation, and we would not be able to do any new capital projects.”

That message acknowledged, task force members said they still have to proceed now as if the status quo were to continue. And now, Morris said, the ball lies in the towns’ court.

“Our goal here is for you to have available a business plan for this project going forward by the end of the year that is feasible, practical and implementable,” said Morris. “It does not account for politics.”

As the meeting wrapped up, LNTC Executive Director Carroll Gray congratulated Morris, Flowers and others for advancing the Red Line agenda.

“Since we’re all having a love fest,” Foxx told the task force members, “I want to say that although I haven’t been able to be as present at the meetings as I would like, I am very impressed with the leadership you have shown to get this moving, and to the professional staff and consultants, thank you. This work is important to me as mayor of Charlotte because I think across the region we have to ... get our communities more connected. I wasn’t joking a year-and a-half ago when I said this is a big thing.”