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Getting Creative on Financing Passenger Rail Getting Creative on Financing Passenger Rail

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Getting Creative on Financing Passenger Rail

The House Transportation and Infrastructure Committee has posed some inventive ideas about funding intercity commuter rail systems like New Jersey Transit, Maryland's MARC, or the Bay Area Rapid Transit in a memo preparing for a hearing on Tuesday. While transit is notoriously a money loser, the committee notes that there is private-sector funding available for investment in rail systems if the operators think outside of the rail community and delve into commercial real estate, paid parking, or even telecom.

The staff cites Washington D.C.'s Union Station as the city's "most visited tourist destination." (Forget the White House.) Union Station sports 130 restaurants and shops and has connections to Amtrak, the Washington D.C. Metro, and MARC. (Also, it has pigeons, a big hit with summer camp kids.) Last year, Amtrak and capital developers released an $8 billion plan to expand Union Station with more retail, residential, and commercial buildings, the committee memo said. Pretty cool.


In addition to promoting train station vending, the memo notes that there are private telecom companies and other non-rail infrastructure firms that would love to lease railroad rights of way. Under these arrangements, a railroad gets paid annually for a telecom firm's use of the space to lay broadband cable, for example. Amtrak got $26 million last year for such leasing deals.

Both the committee's current chairman, Bill Shuster, R-Pa., and former chairman, John Mica, R-Fla., are passionate advocates of luring more private-sector investment into a state and federally-funded transportation system. Rail presents a special challenge because it doesn't generally turn a profit. These suggestions for new sources of private-sector investment probably can't replace the money that comes from federal assistance programs like TIFIA or RRIF, but they can certainly help add to the bottom line in a time when government funding is hard to come by. And who doesn't love the ability to grab a café mocha and a People magazine for the train ride home?

What are states' and cities' biggest challenges in funding commuter rail? How much does ridership matter in the funding scheme? Are there at least some commercial and real estate development possibilities at most rail stops? Where might such opportunities be more limited? Are there legal barriers to leasing railroad rights of way? Should rail fans be worried about inviting the private sector into a system that is supposed to be affordable for people without cars?


From the Transportation Insiders

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