High Speed Rail in the Northeast Megaregion

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

From Vision to Reality

UNIVERSITY OF PENNSYLVANIA SCHOOL OF DESIGN The University of Pennsylvania carries on the principles and spirit of its founder, Benjamin Franklin: Entrepreneurship, innovation, invention, outreach and a pragmatic love of knowledge. Franklin’s outlook of melding theory and practice has remained a driving force in the university’s academic and social mission.

The University of Pennsylvania School of Design embodies these principles as well, linking a diverse range of disciplines through a design perspective. The school houses Architecture, City and Regional Planning, Landscape Architecture, Fine Arts, Historic Preservation, Digital Media Design and Visual Studies. The City Planning Program within the School of Design integrates academic planning theory with practical, client-based applications of planning.

During the program’s final semester, students participate in a capstone studio that serves as the culmination of their planning work at Penn.

Incorporating the skills gained during two years of study, the studio project requires a team of students, under the guidance of professional practitioners and faculty, to collaborate on a project addressing a realworld planning challenge.

In 2010, a PennDesign studio team presented a visionary plan to meet the Northeast’s mobility needs through a new mode: High-speed rail. This plan described in broad strokes what high-speed rail in the Northeast Megaregion could look like and why it is needed. In 2011, a new studio team, consisting of 14 students with diverse planning backgrounds, built upon this plan by providing in-depth analysis in several critical areas: Economic impact, institutional innovation, financial viability, the role of cities and regions, and building the public will. Findings from the semester are available in this report and electronically at http://www.design.upenn.edu/hsr2011/.

The studio would like to extend its gratitude to the instructors Marilyn Jordan Taylor and Bob Yaro for their guidance in producing this report.

The studio would also like to thank the distinguished team of professional advisors who provided invaluable insight throughout the semester.

Cover Image: Penn Studio Illustration

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STUDIO TEAM Brian D’Amico Master of City Planning, Transportation Kendra Fretz Master of City Planning, Public/Private Development Lauren Gaito Master of City Planning, Community and Economic Development Benjamin Goldman Master of City Planning, Transportation Victoria Harris Master of City Planning, Transportation Steve Hurst Master of City Planning, Transportation Emma Johnson Master of City Planning, Land Use and Environment Boris Lipkin Master of City Planning, Transportation Anjuli Maniam Master of City Planning, Community and Economic Development Meg Merritt Master of City Planning, Transportation Allen Penniman Master of City Planning, Urban Design Laura Podolnick Master of City Planning, Transportation Matthew Rao Master of City Planning, Public/Private Development Rebecca Wetzler Master of City Planning, Transportation

INSTRUCTORS Marilyn Jordan Taylor Dean and Paley Professor Robert Yaro Professor of Practice

ACKNOWLEDGEMENTS The studio offers its sincere thanks to AECOM, the Daniel and Joanna S. Rose Fund, Charles Leitner, and William Yaro for their generous contributions to the studio and its European Study Tour, which sent groups of students to several different European countries before culminating in a week-long planning workshop in Madrid, Spain. This planning workshop would also not have been possible without the generous support of the Fundaci贸n Metr贸poli, which hosted the studio in Madrid from March 8 - 12, 2011.

The studio also extends particular thanks to Vincent Goodstadt, Former President of the Royal Town Planning Institute and Honorary Professor at the University of Manchester, who gave generously of his time to organize the Madrid Workshop.

The studio recognizes all of the following individuals whose support, time and ideas have helped make this project a success:

Penn Faculty Dr. David Hsu, Assistant Professor, PennDesign Andrew Huemmler, Lecturer, Penn Engineering Dr. John Landis, Crossways Professor of City and Regional Planning, Department Chair, PennDesign Chris Marcinkoski, Assistant Professor, PennDesign Dr. Vukan Vuchic, UPS Foundation Professor of Transportation Engineering, Penn Engineering, Retired Dr. Rachel Weinberger, Assistant Professor, PennDesign Dr. Laura Wolf-Powers, Assistant Professor, PennDesign

Penn Staff Roslynne Carter, Administrative Assistant, PennDesign Kate Daniel, Department Coordinator, PennDesign Kait Ellis, Executive Secretary to the Dean, PennDesign Stacy Lutner, Operations Assistant, PennDesign Julianne Siracusa, Executive Secretary to the Dean, PennDesign

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

European Study Tour Associates Belgium Denis Bierlaire, Key Account Manager, TUC Rail Ingrid Nuelant, Deputy Chief Executive Officer, Thalys Marc Smeets, Chief Financial Officer, Infrabel

Germany Dr. Paola Alfaro d´Alençon, Professor of Planning, Technical University of Berlin Dr. Ulrike Assig, Joint Spatial Planning Department of Berlin and Brandenburg Dr. Markus Hecht, Professor of Train Engineering, Technical University of Berlin Dr. Albrecht Hinzen, International Affairs, Deutsche Bahn Netz AG Henrik Lindemann, Acting Director, German Transportation Policy, Deutsche Bahn AG Dr. Jürgen Murach, Director, Long Distance and Transportation Policy, Berlin Senate Dr. Deike Peters, Research Director, Center for Metropolitan Studies, Technical University of Berlin

The Netherlands Ruwan Aluvihare, Landscape Architect and Senior Designer, Physical Planning Department of the City of Amsterdam Allart Lensvelt, Project Manager of Public Transportation, Amsterdam Schipol Airport Bas Maas, Urban Planner, Physical Planning Department of the City of Amsterdam Martijn de Wit, Urban Planner, Physical Planning Department of the City of Amsterdam

Spain Andres Fernandez-Ges, Architect, Zaragoza Alta Velocidad Ignacio Jorge Iglesias Diaz, Director of Technological Innovation, ADIF Juan Lopez Redondo, Director of Urban Studies, Institute of Territorial Studies Sergi Lozano Solé, Researcher, Institute of Territorial Studies Juan Pradas, Milla Digital Project Manager, Zaragoza City Council Jordi Prat Soler, Delegate for Railway Activities in Metropolitan Barcelona, Ministry of Public Works

United Kingdom Paul Chapman, Managing Director, High Speed 1 Harry Dimitriou, Director, OMEGA Centre, Bartlett School of Planning, University College of London Phillip Graham, Deputy Director, High-speed Rail, Department for Transport

Julie Mills, Director, Greengauge 21 Stephen Pauling, Principal Transport Planner, Transport for London Shamal Ratnayaka, Transport Strategy, London Underground, Transport for London Tim Smart, Director, Engineering and Assets, High Speed 1 Dr. John Ward, Director, OMEGA Centre, Bartlett School of Planning, University College of London Camilla Ween, Principal Planner, Master Plans, Transport for London

Madrid Workshop Participants Maria Elena Alfonso Pérez, AECOM John Barna, Vice President for Strategic Programs, AECOM Javier Bustinduy, General Manager, BB&J Consult S.A. Dr. Armando Carbonell, Senior Fellow, Lincoln Institute of Land Policy Carlos Cristóbal-Pinto, Head of Studies and Planning, Regional Transportation Partnership of Madrid Gonzalo DeDiego Barrenechea, Global Coordinator, AECOM Mark Dwyer, Director of Cities Lab, Fundación Metrópoli Antonia Garcia Pastor, Steer Davies Gleave Dr. Vincent Goodstadt, Honorary Professor, University of Manchester David Kooris, Vice President, Regional Plan Association Antonio M. López Corral, Professor, Polytechnic University of Madrid Foster Nichols, Assistant Vice President, Parsons Brinckerhoff Fernando Mesa Ortega, Project Director, AECOM Javier Muñiz Sánchez, Director of Architecture and Planning, AECOM Dr. Mark Pisano, Senior Fellow, University of Southern California Dr. Cecilia Ribalaygua Batalla, Chief Executive Officer, HSR Urban Strategies Dr. Juan Luis de las Rivas Sanz, Professor of Architecture and City Planning, University of Valladolid Petra Todorovich, Director, America 2050, Regional Plan Association Dr. Alfonso Vegara, President, Fundación Metrópoli Dr. Lyle Wray, Executive Director, Capital Region Council of Governments, Hartford, Connecticut Clara Zamorano, Jefe de Gabinete de Organismos Internacionales en ADIF

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

Professional Associates Dr. Peter Angelides, Vice President and Director, Econsult Corporation Jeff Barg, Project Manager, Penn Institute for Urban Research John Conlow, Senior Director, Corridor Planning, Amtrak Rina Cutler, Deputy Mayor for Transportation and Utilities, City of Philadelphia Chad Edison, Transportation Industry Analyst, Federal Railroad Administration Albrecht Engel, Vice President, High-speed Rail Division, Amtrak Emil Frankel, Director of Transportation Policy, Bipartisan Policy Center Drew Galloway, Assistant Vice President, Policy and Development, Amtrak Stephen Gardner, Vice President, Policy and Development, Amtrak Peter Gertler, Chair, High-speed Rail Services, HNTB Xiao He, Penn Engineering Victoria Hong, Assistant Media Planner, Dailey Dr. Toni Horst, Senior Consulting Manager, AECOM Charles Isdell, Former Director and CEO, Philadelphia International Airport Mike Krusee, Innovative Finance Initiative Charles B. Leitner III, Chief Executive Officer, Greenprint Paul Levy, Executive Director, Center City District Dr. Michael Likosky, Senior Fellow, New York University Daniel Loschacoff, Global High-speed Rail Coordinator, KPMG Diana Mendes, Senior Vice President and National Director of Transit Planning, AECOM Paul Nissenbaum, Director, Office of Passenger & Freight Programs, Federal Railroad Administration Jason Owens, MPA Candidate, The Fels School David Panagore, Chief Operating Officer, City of Hartford Matthew Rader, MBA Candidate, The Wharton School Karen Rae, Deputy Administrator, Federal Railroad Administration Bryan Rodda, Consultant, Deloitte Consulting, LLP Allan Rutter, Senior Associate, Cambridge Systematics David Seltzer, Principal, Mercator Advisors David Sigman, Executive Vice President and Principal, LCOR Inc. Louis Thompson, Principal, Thompson, Galenson & Associates, LLC Polly Trottenberg, Assistant Secretary for Transportation Policy, U.S. Department of Transportation Dr. Richard Voith, Senior Vice President and Principal, Econsult Bruce Williams, Senior Consulting Manager, AECOM William Yaro, Esq., Partner, Shearman & Sterling LLP Selina Zapata, Transportation Planner, AECOM

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION From Vision to Reality

www.design.upenn.edu/hsr2011

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

St. Pancras Station, London

TABLE OF CONTENTS Executive Summary

11

Vision

31 32 40 42

The Economic Imperative The 2010 PennDesign HSR Studio What’s Next for High-Speed Rail

HSR Effect Balancing the System and Optimizing Capacity System Design Benefit-Cost Analysis Wider Economic Benefits

Institutional Innovation Advantages of Infrastructure Separation and Open Access Criteria for a Successful Solution Powers Required to Implement HSR NECSA: Project Manager for the Northeast Environmental Impact Study

Financial Viability The Cost of High-Speed Rail Phasing Financial Performance Public Financing Sources Private Financing Sources

Metropolitan Role Station Area Regeneration (StAR) Philadelphia Hartford The Metropolitan Role in the Northeast Corridor

Changing the Conversation

45 46 56 60 67 83 86 98 99 100 107 119 121 121 124 140 154 159 160 170 182 197

Dispelling Myths, Inserting Facts High-Speed Rail and You

199 201 207

References and Citations

212

Appendix

224 225 229 245 259

Appendix Appendix Appendix Appendix

A: Timetables B: Benefit-Cost Analysis C: Financial Analysis D: Spring 2011 Presentation to USDOT

HS1 Javelin train after heavy snowfall

EXECUTIVE SUMMARY

EXECUTIVE SUMMARY High-speed rail is more than just a means of travel.

It is a powerful tool that can enable growth, achieve balance in a transportation system, and revitalize underperforming cities. It is the foundation upon which the Northeast Megaregion of the United States will shape its destiny in the coming years.

The Northeast Megaregion extends from Maine to Virginia and is the economic powerhouse of the nation. It is home to 50 million residents and has a $2.6 trillion economy focused along the dense Northeast Corridor from Boston to Washington. By 2050, the Northeast is predicted to grow by an additional 20 million residents, which has the potential to generate enormous economic growth.

This growth is threatened, however, by the strained capacity of the Northeast’s infrastructure systems. Congested and deteriorating from years of deferred maintenance, the highways, runways, and rail lines of the Northeast cannot meet the needs of the future. There is also little room to build upon these existing systems, with highways that run through dense urban areas and airspace that is almost completely full.

The success of the United States has always depended on mobility.

Without investments in canals, railroads, highways, and runways, this vast country would never have realized its creative and productive potential. In 2010, a group of researchers from the University of Pennsylvania’s School of Design presented a visionary plan to meet the Northeast’s mobility needs through a new mode: High-speed rail.

The 2010 PennDesign plan proposed a high-speed rail (HSR) system that would run on its own dedicated tracks, which would allow it to provide unprecedented reliability and freedom of movement. This proposal paved the way for Amtrak to release its own “Next Generation” highspeed rail plan for the Northeast. High-speed rail has the potential to link economies, regenerate regions, and provide new opportunities for millions of Americans. Many of America’s global competitors have embraced high-speed rail, from the European Union to Russia, Brazil, and Saudi Arabia, and some have made these systems centerpieces of their economic growth strategy. The United States risks falling behind if it does not invest in 21 st Century infrastructure.

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It is not enough to build high-speed rail because the rest of the world is doing so. There must be compelling reasons to build high-speed rail in America, now. The Northeast Megaregion, with a population density of over 8,200 persons per square mile and a portfolio of high-value knowledge-based industries, is uniquely positioned to benefit from highspeed rail. The Northeast’s cities are a “string of pearls” that span evenly along the 457-mile corridor, which is well within the ideal range of any HSR system. Among these cities are economic generators and places with unmet economic potential that will grow together with the aid of frequent, reliable connections. The Northeast features a culture of rail ridership, surging population growth, and a large demand for inter-city travel that cannot be met by current modes.

The Penn proposal of 2010 described in broad strokes what high-speed rail in the Northeast Megaregion could look like and why it is needed.

The proposed system extends from Washington to New York along the existing rail corridor before moving eastward along Long Island and traveling through a new tunnel to New Haven, Hartford, and Boston.

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Proposed alignment: The new system will run on two new dedicated high-speed tracks from Boston to Washington, with upgraded conventional tracks providing additional service.

EXECUTIVE SUMMARY

It would achieve a top speed of 220 miles per hour and travel the complete route in 3 hours and 28 minutes—approximately half the travel time of Amtrak’s current Acela service. This new system would achieve high levels of on-time reliability, frequency and capacity not possible on the Northeast’s current rail network.

This report builds on that proposal, providing in-depth analysis in several critical areas.

High-speed rail will drastically reduce travel times in the Northeast, bringing the major cities of the Northeast closer to New York, and to each other.

•

The HSR Effect demonstrates the strong economic and social benefits that the Northeast and the nation will accrue from highspeed rail, describes the proposed system design, and explains how high-speed rail will integrate with other modes as part of a balanced transportation system.

•

Institutional Innovation details the structures and institutions that will implement high-speed rail across eight different states and the District of Columbia.

New York City

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•

Financial Viability presents two complete options that can pay for the construction, operations, and maintenance of the HSR network, including ways to facilitate market-driven investment.

•

The Metropolitan Role describes the ways that cities and regions must prepare for high-speed rail and the benefits they will achieve if they do so.

•

Changing the Conversation outlines an inclusionary strategy to build support for high-speed rail, making the benefits of HSR accessible and applicable to broad groups of stakeholders and supporting a culture of investment in the future.

THE HSR EFFECT The Northeast transportation system is currently at capacity and will be unable to meet future travel demand. Inter-city travel within the Northeast Megaregion by road, rail, and air networks faces substantial congestion that results in longer travel times and reduced reliability.

The answer to this problem lies in a balanced transportation system, the foundation for which is high-speed rail.

The Northeast Megaregion features the four most delay-prone airports in the nation—Newark, LaGuardia, JFK, and Philadelphia—as well as the nation’s most congested stretch of highway on Interstate 95. Of the top 10 most congested metropolitan areas in the United States, New York, Washington, Boston, and Philadelphia rank 2nd, 4th, 8th, and 9th, respectively. The Northeast rail corridor between Boston and Washington currently features heavy commuter rail traffic in addition to Amtrak’s inter-city services, leaving little room for additional service on the existing tracks.

Across these networks, the rail system has the greatest potential to add the most capacity in the most cost-effective manner. To expand aviation capacity, large amounts of available land would be needed to add new runways or build new airports. In more than 50 years, only one new greenfield airport has been built in the United States, and this, Denver International, required a land area twice the size of Manhattan.

Philadelphia International Airport is proceeding with an expansion project that will cost $5.2 billion, but this sizeable investment will only adequately meet the airport’s capacity needs until 2035, after which delays will start to mount again.

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EXECUTIVE SUMMARY

Expanding capacity on Northeast highways would also require large amounts of land and incur substantial costs. A recent report by the I-95 Corridor Coalition estimated that annual expenditures of approximately $25 billion would be required to meet projected capacity needs through 2035. Additionally, because many highways in the Northeast run through dense urban areas, expansion would require significant land acquisitions that would be practically and politically difficult.

The construction of a new high-speed rail system on dedicated tracks would serve more than 37 million passengers annually and have the ability to carry many more as the Megaregion continues to grow. At its highest use, this system would allow for a train to leave New York every five minutes during peak service, providing a foundation for growth and mobility throughout the 21 st Century.

Proposed system design: The new system will feature six different service patterns, from express service between top-tier cities to regional, commuter, and airport services.

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This new system will serve more than 27 million passengers who would have driven to their destination and more than 2 million who would have flown once the system is fully built in 2035. This will reduce pressure on the Northeast’s congested roads and runways and will reduce traffic and delays. High-speed rail will provide direct connections from Northeast cities to several major airports, including JFK, EWR, and PHL. This will reduce the need for short-haul flights and also increase airport capacity for long-distance trips: Fewer flights from Boston to New York, and more flights from Boston to Singapore.

In this way, high-speed rail will integrate with car and air transportation, forming a balanced and optimized transportation system for people and goods throughout the Northeast.

Compared to the alternatives of driving and flying, high-speed rail is also safer, faster, and more environmentally friendly. The construction of a high-speed rail system in the Northeast will provide tangible benefits to the American public. This proposal features a detailed benefit-cost analysis that compares the benefits society accrues from high-speed rail to the costs of constructing the system. These include benefits from increased safety, travel time savings, reduced emissions, reduced highway maintenance, and residual asset value. Following the guidelines used by the U.S. Department of Transportation, these benefits and costs were projected over a 53-year time horizon and adjusted using the social discount rate of seven percent.

Northeast Corridor high-speed rail saves: 3 million tons of carbon monoxide 3,500 lives 2.9 billion hours 5.4 billion gallons of gas 4.3 billion dollars of highway maintenance

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EXECUTIVE SUMMARY

The results of this analysis are clear: The benefits of high-speed rail significantly exceed the costs. These benefits will extend from rail passengers, who will save a cumulative total of 2.96 billion hours of travel time, to every single individual who breathes the Northeast air with 3.06 million fewer tons of carbon monoxide. The construction of a reliable high-speed rail system will divert more than 1.36 billion riders from cars, which will avoid more than 1.6 billion motor vehicle crashes, save $278 billion in accident costs, and more than 3,500 lives. HSR will also divert more than 121 million passengers from airplanes, which will reduce the need for 1.70 million short-haul flights. The discounted cumulative monetary value of these benefits is $71.8 billion, which exceeds discounted project costs of $52 billion by the ratio of 1.38.

Moreover, investment in high-speed rail will yield strong economic and social benefits on the macroeconomic scale. High-speed rail reduces the “friction of distance;� it brings places closer together by allowing people to travel greater distances in shorter amounts of time. The proposed HSR system will bring 2.9 million additional people within an hour of New York, 1.3 million within an hour of Boston, 1.1 million within an hour of Washington, and 10.5 million within an hour of Philadelphia. This enhanced mobility will create job opportunities for individuals and allow businesses to draw from a larger, more talented workforce. It will enable new levels of collaboration across common industry clusters throughout the Northeast and bring underperforming cities within the orbit of stronger ones.

Economists refer to these gains as agglomeration benefits, and empirical studies have confirmed that high-speed rail can effect these changes.

In Germany, the construction of a new high-speed rail line between the strong cities of Frankfurt and Cologne led to an increase in GDP for the underperforming cities between them. In the United Kingdom, high-speed service brought the northern cities of York, Edinburgh and others within a two-hour commuting range of London. This increased property values, decreased unemployment, and transformed the region’s economic geography. Following this example, the British Conservative government is implementing a new HSR project, High-Speed 2, which will link London with Manchester and Leeds in the north. While the British government is cutting spending across the board, it has chosen to proceed with this project because of its potential to transform the chronically underperforming areas of northern England. In the same way, highspeed rail has the potential to transform under-performing cities in the Northeast.

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INSTITUTIONAL INNOVATION A new institutional framework will be required to implement high-speed rail in the Northeast Megaregion. Of key importance is a new singlepurpose public benefit corporation focused on financing, designing, building, and managing Northeast HSR and associated activities in the Northeast rail corridor. This public benefit corporation must be designed in such a way that it can quickly gain the support of Congress, the Northeast states, the investment community, service operators, and regional and metropolitan officials.

Why is this new entity required? The proposed high-speed rail alignment travels through eight different states and the District of Columbia.

Amtrak currently operates through all of these states along the existing Northeast rail corridor, but it does not control train dispatching over significant segments of the tracks. Much of the route in New York and Connecticut, as well as some in Massachusetts, is under the control of commuter railroads. This fractured operational responsibility causes conflicts and delays among train operators and makes track upgrades difficult to implement. There are few institutional frameworks for these nine different governments to cooperate, and when they receive rail funding they often prioritize their commuter services over inter-city travel.

Spanish rail institutional structure: In Spain, as in many European countries, separate entities own the tracks and run the trains. This structure can provide a dedicated revenue stream for track maintenance while also encouraging private sector involvement.

Spanish Government (100% Shareholder)

RENFE

ADIF

(Train Operator)

(Infrastructure Manager)

Future Private Operators Construction P3

18

Telecom P3

Utilities P3

Real-Estate P3

EXECUTIVE SUMMARY

Amtrak, through an act of Congress, is the owner of a sizable portion of the Northeast rail corridor, including the entire segment between New York and Washington. This position is unique for Amtrak, which operates its trains on privately owned freight railroad tracks through much of the nation and pays access fees to these owners.

The Congress has also given Amtrak multiple conflicting directives that have limited its ability to optimize its use of the Northeast rail corridor as an asset. These include the requirement to run largely unprofitable cross country trains along with viable state corridor services and the profitable regional and Acela services in the Northeast, all while striving for financial self-sufficiency.

Much of the rest of the world has moved to a different organizational structure to implement high-speed rail projects, focusing on the separation of infrastructure from operations to allow for competition, optimization, and public-private partnerships. This structure includes those that focus entirely on a single high-speed rail corridor (as in the United Kingdom), those that focus on multiple corridors through an autonomous entity (as in Spain), and those that focus on multiple corridors under an integrated holding company with the operator (as in Germany). After examining these structures with high-speed rail experts in both the U.S. and Europe, the PennDesign team has concluded that a combination of the British and Spanish models, adapted to US needs, will be the most effective for the Northeast Megaregion.

This approach will involve the creation of a new public benefit corporation: The Northeast Corridor Systems Authority (NECSA).

Amtrak and the commuter railroads would both transfer their Northeast infrastructure assets to this new Corporation but continue to operate their services in the Northeast. This would unify the corridor under one authority with the focused mission to ensure optimized and coordinated rail travel for the Northeast. NECSA would apply for and coordinate government funding and financing sources to upgrade the existing corridor and to develop the new high-speed infrastructure. NECSA would also act as the project manager for all stages of development, from the issuing of tender offers for construction to the coordination of the environmental impact process.

NECSA would enter into partnerships with local governments and private developers to promote station and station-area development, and it would coordinate the development of utility corridors along the new rail right-of-way.

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The Northeast Corridor Systems Authority will have several distinct advantages over status quo institutions. It will: •

Have a long-term outlook, with relative autonomy from political pressures.

•

Work with diverse stakeholders to ensure fairness, transparency, and cooperation.

•

Employ top experts in high-speed rail planning, engineering, finance, and project delivery, including experts from Amtrak’s HSR and Northeast Corridor planning groups. Gain the confidence of Congress, the Administration, and the states to ensure adequate funding and support.

•

Gain the confidence of the private sector by coordinating public review processes and guaranteeing that projects will move forward.

•

Be accountable for the accomplishment of a clearly-defined mission.

Proposed NEC institutional structure: A new public benefit corporation, NECSA, will be uniquely committed to inter-city rail in the Northeast Megaregion.

US Federal Government

Congress, USDOT, FRA

Long Term Investors

Private Operators

Amtrak

Commuter Rail Construction P3

20

Telecom P3

Utilities P3

Real-Estate P3

EXECUTIVE SUMMARY

FINANCIAL VIABILITY The travel market in the Northeast Megaregion is strong, and highspeed rail in the Northeast is financially viable. This report outlines two complete options to pay for the construction, operations, and maintenance of an HSR network through a variety of funding and finance mechanisms based on both domestic and international examples.

Through all of these options, both the private and public sectors will play important roles.

Financing a high-speed rail project is a complex endeavor, and to say that either the public or private sector should pay for high-speed rail belies both the variations in financing sources and the ways in which these sectors are intertwined. The public sector’s role in financing can range from direct grants and equity contributions to low-interest loans, loan guarantees, tax credits and tax-preferential incentives.

The private sector can contribute both debt and equity at many stages of the process, such as at the project outset, through the sale and leaseback of train equipment, and through concession agreements once operations are stabilized.

These roles also extend beyond the mere provision of funds. The public sector has the critical responsibility to manage political and environmental risk to guarantee that the project will move forward. The private sector can also have a vital role to play in building the network, which it can often do more effectively and efficiently, and as a potential train operator.

These roles represent each side’s relative strengths and the principle of co-investment. When these roles are followed, the system will be realized and both will benefit from its rewards.

This division of responsibilities is demonstrated in high-speed rail projects throughout Europe, in contrast to many Asian and Middle Eastern examples where such projects are largely government funded and directed. In many of these European projects, the European Investment Bank (EIB) plays an active public sector role: It provides patient capital and encourages the careful risk management that allows private investment to enter. The EIB makes below-market, subordinated loans that give private lenders the security they need to invest in high-speed rail projects. The European Union also mandates that rail infrastructure (tracks and signals) be separate from train operations, with distinct entities responsible for each task. This division allows for access fees, which provide a new revenue source for both system maintenance and potential investors. It also opens the door to the policy of neutral access, which makes HSR infrastructure available to multiple competing train operators.

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The equivalent funding sources in the U.S. do not reach the scale of European capital available for transportation projects, but the foundations do exist to build on existing programs and augment them with new sources and institutions. The Transportation Infrastructure Finance and Innovation Act (TIFIA), for example, provides loans to incentivize private investment that are a smaller-scale version of those provided by the EIB. The financing options presented in this report blend the best practices of international examples with the strengths and resources of the American context.

The two funding options proposed in this report can be summarized as follows: 1.) Use public financing tools to minimize public grants and attract private investment. This model would utilize current and expanded federal financing and incentive programs to attract the necessary capital for high-speed rail. These tools include qualified tax credit bonds, expansion of the TIFIA and RRIF programs, and funds from a new federal infrastructure bank. These tools represent a significantly lower cost to the government than direct grants, and in many cases these are designed to attract private capital and ultimately be repaid. This model would require some direct grant funding, particularly for the early stages of construction and to upgrade the existing rail corridor. However, no new grant funding would be required once the system is operational and generating revenue from user fees. Overall, the incorporation of public financing and other sources is estimated to limit total required grant money to $26.5 billion over the life of the project. This option would leverage public financing mechanisms to ensure both efficient project delivery and a return on investment for the public sector.

Scenario 1: Direct grants and 100 percent Qualified Tax Credit Bonds will be used in the early stages of the project, while RRIF, TIFIA, infrastructure bank funds, private sector loans, and utility leasing proceeds will be used once operations commence. User fees from operations will repay these loans, and no new grants will be required once operations begin.

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EXECUTIVE SUMMARY

Scenario 2: NECSA will lease sections of the track to private investors for 10-year periods, which will allow the public sector to recoup a significant portion of its upfront investment.

2.) Procure a private sector concession to lease and maintain the HSR infrastructure once operations are stable. This model would allow for significant private funding through a long term lease of the HSR infrastructure. Based on the example of High Speed One in the United Kingdom, this concession agreement would likely occur sometime around the sixth year of system operations, at which point the infrastructure manager will be collecting consistent revenues through access fees. This arrangement would likely attract institutional investors such as pension funds that look for moderate, steady returns. These investors would provide the government with a large payment in exchange for the right to operate the infrastructure and collect these access fees over time. Public funding and financing mechanisms would be used to construct the highspeed rail line, but the public sector would recoup a significant portion of these costs in the future from the proceeds of the concession.

Because the asset life of the high-speed network will be as long as 125 years, the government will be able to issue additional concessions after the original term lapses. These agreements will be structured so that access fees are sufficiently applied to system maintenance before dividends are paid to concession holders. This model presents the promise that private capital can essentially reimburse the government for some of its initial upfront expenditure. This proposal estimates that a total of $32 billion can be raised through this concession.

These options address the need to assemble upfront capital to design and build the high-speed rail system, in a phased plan that nonetheless requires a commitment to the corridor as a whole.

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Once the system is running, it will attract revenue from a variety of sources, including ticket revenues, passenger facility charges, on-board food and beverage sales, retail leasing and parking income from stations, and energy resale through regenerative braking. A significant source of revenue will also come from sharing the HSR right-of-way with utility companies for electricity transmission, fiber optic cables, natural gas pipelines, and cell phone towers, which allows the HSR corridor to meet multiple infrastructure needs at the same time. The combination of these sources will allow Northeast high-speed rail to fully cover its operating expenses within a few years upon commencing service and, in addition, provide a surplus for reinvestment and/or financing payments.

Scenario 1 (left) uses public financing tools to minimize public grants and attract private investment. Scenario 2 (right) leverages private sector concessions once operations are stable.

The financial projections developed for this project are robust and have been tested for fluctuations in population growth, inflation, and automobile congestion. Through all of these scenarios, Northeast highspeed rail is financially viable. They are based on a travel demand model for high-speed rail, which calculates future ridership for each pair of cities based on several factors: Current and projected inter-city travel between these cities, the size and distance of the cities from each other, the travel time between these cities on high-speed rail, and the average price of a high-speed rail ticket relative to plane tickets and gas prices.

Simply put, the many factors included in this model allow for confident prediction of future ridership. This model also accounts for induced ridership demand in two areas, knowledge industry business travel and long-distance commuting. In 2035, when the system is fully operational, total annual ridership on Northeast high-speed rail is projected to be 37 million.

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EXECUTIVE SUMMARY

THE METROPOLITAN ROLE Metropolitan areas, cities, and station areas must prepare for high-speed rail, and they will receive tangible benefits if they do. The high-speed rail system will change the way that cities and regions relate to each other, but these areas must respond in a coordinated fashion for the system to act as a catalyst for growth. When this system reaches its full potential, it will produce substantial economic benefits for cities that simultaneously drive high levels of ridership. This is known as the Metropolitan Role.

Station Area Regeneration (StAR) through high-speed rail is greater in scope and scale than traditional Transit-Oriented Development (TOD).

When cities and regions properly prepare for high-speed rail, StAR can lead to physical, economic, and demographic transformations within a one hour range of the station.

It’s not about development, it’s about being ready for development.

By developing around high-speed rail stations, cities and metropolitan regions can promote Station Area Regeneration, or StAR, which refers to the physical, economic, and demographic transformation that can occur with the construction of a high-speed rail station in a city. These changes, especially the physical changes, will be most dramatic in the immediate station area, with new demand for office space, housing, retail, and services leading to an increase in land value and the construction of new buildings to meet this demand. The term “regeneration” suggests that these changes to the station area will be greater than just new buildings, but can also include new activities, public spaces, transit options, and attractions that can draw more people to the station area to work, shop, travel, and live. The scale and impact of StAR is greater than traditional Transit-Oriented Development, extending through the city and the entire region.

TOD’s influence reaches a 5-10 minute walking radius.

StAR’s influence can reach as far as a 1-hour transit radius.

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HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

The new activity is market driven. This makes regeneration different from “renovation,” which addresses physical changes within the existing market conditions, and “renewal,” which is the public sector addressing market failure. Regeneration is the creation of new market opportunities, brought about by new levels of connectivity that widen the range and threshold for goods and services and allow new activity to manifest itself within the physical environment.

StAR will begin at the station itself and then ripple out through the entire metropolitan area. The station can be a hub of economic activity, with a vibrant retail mix that serves both passengers and the surrounding community. The value of increased connectivity will increase property values and lead to office, retail, and residential development around the station, which can then create more activity and demand for more services. Cities and regions can harness these benefits through the tools of value capture: Sales tax, real estate taxes, transfer taxes, income and payroll taxes, special assessment districts, and tax increment financing.

These tools can then be reinvested in the station area, train infrastructure, or throughout the city to catalyze future development and growth.

Regeneration, however, is not guaranteed. It requires a variety of policy and design interventions for HSR to reach its transformative potential throughout the entire region. Examples from Europe have shown that while nearly all cities benefit from high-speed rail, the greatest benefits come to those that are truly prepared.

The first and most important of these interventions is an intermodal system of regional connectivity. The benefits of high-speed rail are directly proportional to its ridership: The stronger the connections between the station and the region’s population, the greater HSR ridership will be. These connections can include buses, trams, bus rapid transit, light-rail, subways commuter railroads, bicycles, pedestrians, and car shares in addition to existing space for private automobiles. Where these networks do not yet exist, high-speed rail can serve as the backbone and catalyst for their development.

To capitalize fully on access to HSR, cities and regions must also prepare themselves by becoming vibrant places to live, work, and innovate. This involves a focus on residential life and livable downtowns, support of the business environment, establishing a well-trained workforce, identifying and promoting the unique features of that place, using targeted business incentives to grow high-value industries, adopting appropriate zoning, and streamlining the entitlement and development approvals process.

A region-wide strategy is essential to coordinate these preparations and ensure maximum growth.

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EXECUTIVE SUMMARY

At the station building and station area level, there are three major planning criteria to be considered:

Proposed Market East Station in Philadelphia: Station design that facilitates transfers across modes will ensure that the high-speed rail system has the greatest impact on the surrounding region.

•

The station site should be central to the entire region. This can be the physical center of the city, the center of its economic activity, or the center of its transportation connections. Within the station area should be parcels of developable land, ideally publicly controlled.

•

The station should serve as a gateway to the region, with halls and passageways that facilitate easy movement and evoke a sense of civic identity.

•

Station design should facilitate transfers across modes. The will increase system ridership and its impact on the entire region.

If cities and regions properly prepare for high-speed rail, the HSR Effect will be fully realized in the physical and economic environment. This will benefit the businesses and residents of cities and entire regions.

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HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

CHANGING THE CONVERSATION The full report that follows this Executive Summary will build upon its central argument—that high-speed rail is an essential investment in the future of the Northeast Megaregion. High-speed rail responds with efficacy and impact to the questions that face the Northeast in the coming decades: How to compete, how to grow, and how to get around. To be sure, high-speed rail is not the only way these questions can be addressed, nor will it alone provide the answer. High-speed rail is merely a tool, but it is also one with great transformative potential. It is a long-term foundation for long-term prosperity.

Taiwan’s HSR campaign: Be There that speaks to time with others. 18

Spain’s RENFE campaign. “The best way to protect nature is by imitation. The duckbill nose design makes the train 30 percent more energy-efficient.” 19

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EXECUTIVE SUMMARY

Transformation and prosperity are abstract concepts, however. The objective of this report is to demonstrate the impact of high-speed rail, as well as its imperative, on both a national and personal scale. This is a change in the public conversation that will make the benefits of highspeed rail accessible and relatable to a wide audience. It is part of a larger national conversation that Americans must have about investing in their future. Such investments will pay dividends to Americans from all walks of life:

• For families, high-speed rail will mean more time with parents, children, and loved ones.

• For everyone, high-speed rail will mean cleaner air.

• For drivers, high-speed rail will mean more room on the road. For flyers, it will mean more flights to far-away places.

• For business travelers, high-speed rail will mean more meetings, greater productivity, and the guarantee to get there on time.

• For businesses and workers, high-speed rail will mean jobs: More places to work, more people to hire, and 36,000 direct new jobs for every $1 billion of investment.

• For everyone, high-speed rail will mean options, mobility, and freedom of choice.

In the current political and financial context, it may be difficult to imagine proceeding with a project of this magnitude. This PennDesign proposal calls for a major capital investment at a time in which governments at all levels are facing large deficits and cutting essential services. But this crisis only sharpens the imperative for growth—growth that will not occur without the capacity to move people, goods, and ideas. It is an investment in the future that must be based on a newfound public will: A culture of investment from which everyone will gain.

This Executive Summary, and the detailed report that will follow, are the toolkit to make this imperative known. They are also the detailed guide to make this vision a reality.

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HIGH-SPEED RAIL I N T H E NORTHEAST MEGAREGION: From Vision to Realit y

ICE Train leaving Amsterdam Central Station

SECTION 1: VISION

1.0 VISION SECTION OVERVIEW High-speed rail in America’s Northeast will create capacity, reduce travel time, and achieve reliability and balance in the megaregion’s systems of access, enabling the Northeast megaregion to remain a principal engine of the US economy in the 21 st century.

The Northeast megaregion—stretching from Maine to Virginia—is America’s economic powerhouse, with 50 million residents, a $2.6 trillion economy—representing fully 20 percent of US GDP and a disproportionate share of the nation’s knowledge-based innovation economies. The United States Census Bureau projects that 20 million additional residents will live in the Northeast by 2050, which also indicates the potential for significant economic growth. 1 However, the reality is that the Northeast already faces numerous constraints to population growth and economic development due to its deteriorated and congested infrastructure, which is quickly proving to be inadequate to meet the megaregion’s needs.

Infrastructure is getting older and more expensive to repair and replace, and yet, in response to current budget deficits, federal and state officials are calling for further reductions even in programs to maintain existing systems. Given the importance of connectivity to the economy, unless existing systems are brought to a state of good repair and new capacity is created in the Northeast’s major infrastructure systems, its full economic potential will be unrealized.

How, then, can the necessary capacity be created in such a costconstrained environment? Megaregions are too large to be easily traversed by automobiles and too small to be readily accessible by air—as anyone who has flown from Logan to LaGuardia or driven from Baltimore to Boston can attest. In Asia and Europe, governments, economic leaders, and investors have discovered that the scale of megaregions is uniquely suited to high-speed rail for intercity travel, and virtually all of the Northeast’s Asian and European competitors are moving aggressively to build these systems. America is about to make the same discovery. HSR can be the system of choice for creating new intercity travel capacity, but it will only be effective when it is conceived and implemented in a balanced transportation system, encompassing roads, rails, and runways.

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HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

VISION: THE ECONOMIC IMPERATIVE A New Economic Geography Cities have always been the economic organizing units of the United States. They function as centers of gravity, drawing large populations, talent, innovation and markets. In recent decades, however, the forces of globalization and decentralization have transformed the nation’s economic geography, creating new megaregions, that comprise networks of metropolitan areas. Megaregions now function as primary engines of economic growth and development in the global economy, where social connections, economic interaction and transportation activities take place. In America 2050 initiative, the Regional Plan Association identified eleven megaregions in the United States. The Northeast megaregion, with the 450-mile stretch of the Atlantic seaboard between Washington D.C. and Boston as its spine, is America’s largest agglomeration of people, economic activity, and urbanized land. 2 Furthermore, the projected addition of 20 million people to the megaregion’s population will provide the opportunity to attract a millions of new jobs to the area.

In a growing world of information, technology and innovation, the need for regional infrastructure that facilitates rapid exchange among individuals and businesses is becoming more imminent. We live in a networked economy that is often not reflected in federal grants and initiatives that are distributed across the country from funding silos to disconnected needs. Building high-speed rail in the Northeast corridor will have significant time-space effects on the knowledge economy.

High-speed rail will alter the new economic geography and shrink distances, making face-to-face business interactions effortless for global industries. In this period of economic uncertainty, it is important for the government to create a framework to unleash the competitiveness and entrepreneurial spirit of regional ideas and solutions. High-speed rail is vital to an innovation-led economic development strategy that leverages and connects regional assets and human talent.

Within the Northeast megaregion, the major cities, Boston, New York, Philadelphia and Washington, DC, are among the top ten cities that have the highest numbers of knowledge workers in the nation. Boston and Washington also rank in the top ten in percentage of workforce in knowledge industries, with 34 percent and 38 percent respectively.

Overall, the Northeast megaregion’s average share of metropolitan workforce in knowledge industries is 26 percent. To support continued success in the knowledge economy, the Northeast megaregion needs to pursue balanced development by creating strong connections among the megaregion’s metropolitan areas.

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High-speed service Conventional-speed service

2011 PennDesign studio alignment proposal.

SECTION 1: VISION

These connections will link metropolitan regions together through infrastructure and strategic cooperation, thereby improving the competitive potential of intermediate cities and discouraging economic “hyper-concentration” in just a few key cities. Whether an individual metropolitan area is concentrated or decentralized, it needs a transport system that can efficiently move goods and people through its own network and among neighboring areas. 3 It is the effect of speed in shrinking critical time-distances, not speed in itself, that will prove important. Domestic clusters spread along the northeast corridor – research development institutions in one location, manufacturing in a second node, and distribution hubs in a third place – will be linked into collective or complementary economic networks to harness their synergies. These networks of knowledge will have tremendous spatial-economic impacts on both primary and secondary cities and will create the critical mass necessary to turn key clusters into powerhouses of the global economy.

A Strategy for Balanced Transportation High-speed rail is not a mode that can take the place of other modes.

It can, however, bring mobility systems back into balance, even under constrained conditions such as those facing the Northeast. An out-ofbalance transportation system is one where the most attractive mode for a given trip is not the optimal mode with respect to system capacity.

Imagine that you live some 25 miles from your office. Your office is accessible by transit, but that means a two-seat ride followed by a 15-minute walk; all in all 45-minute trip that costs $5 each way. Instead, you could drive; it’s only a 30-minute drive and it doesn’t use more than a gallon of gasoline each way. In this case, driving would seem to be the more attractive choice, but when millions of people make the same decision, the time and the money that each person can save starts to shrink. The roadways get more congested, and more expensive to maintain, often at the expense of maintaining the transit system.

Or, consider this example: you live in a small city where you do business for a large company headquartered in a larger city 100 miles away.

You are required to make that trip very often to remain active in the corporation while maintaining contact with local clients. Without a balanced transportation system, that company may not want to undertake the expense of maintaining operations so far away; it would actually be cheaper to fire you than keep you on and pay for your travel.

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HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

TIME-SPACE COMPRESSION

Existing conditions: drive time from Midtown Manhattan. The 1-hour radius barely reaches across the East and Hudson rivers.

Future conditions: a 1-hour radius stretches from Hartford, CT to Wilmington, DE.

Future conditions: time-space compression will bring the major cities of the Northeast closer to New York, and to each other.

New York City

34

SECTION 1: VISION

These aren’t purely hypothetical situations. Real people by the millions face these very real challenges every day, and many assume that it is simply a part of life. But out-of-balance transportation systems don’t just make people’s lives inconvenient. They put a strain on public finances that could be better used in other areas, from education to national defense.

Out-of-balance transportation systems also create an environment where it becomes financially prudent to locate firms where it ordinarily wouldn’t make sense to do so. In a balanced transportation system, that office would never have decided to locate so far from its labor market.

The Northeast megaregion is decidedly out of balance. Far too many trips are being taken on the least efficient modes given the distances involved.

Too many cars are making long inter-city journeys, and too many shorthaul flights are taking up the corridor’s crowded airspace. The answer is not to add capacity only to those modes that are most crowded, but rather to invest in a new mode that can relieve stress on the others while creating long-term capacity for intercity journeys in a cost-effective and space-efficient way. That new mode, as many nations facing unbalanced mobility systems have already discovered, is high-speed rail.

Top and average speeds of world HSR lines.

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HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

The StAR Effect: The Mother of All TODs The success or failure of high-speed rail to realize its potential to benefit cities depends upon a high degree of connectivity between each metropolitan area and its point of contact with this new high-speed mobility system: the station itself, and its surrounding area. At each level—national, megaregional, metropolitan, and local—there are shared goals, common concerns, and unique opportunities to promote economic development and an improved quality of life. The local examples that are profiled in this report, the cities of Philadelphia, Pennsylvania and Hartford, Connecticut, illustrate the potential of high-speed rail to completely transform underperforming urban districts. They also demonstrate the potential for growing cities to promote the success of a balanced transportation system for the megaregion.

Linear transportation improvements, like streetcars and other rail transit modes, have been shown to generate activity and raise the land value of surrounding parcels—though usually only slightly. That value can be recaptured directly, through measures like tax increment financing, or indirectly through the increase in income and sales tax revenue over the long term. The concepts of value added and value capture are central to the success of Transit-Oriented Development (TOD), a locallyimplemented project that combines sound land use planning with the presence of a pedestrian-friendly transit station.

A prototypical StAR project: Transbay Terminal in San Francisco, CA. 4

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SECTION 1: VISION

Traditional TOD is considered to be most effective within a five or tenminute walking radius of the station, depending on the transportation services present at the center. In a high-speed rail system, the capacity and high speeds of HSR present benefits that can be shared within an entire region. The California HSR Authority has estimated, for example, that a zone within a one-hour radius of a high-speed rail station can see some value added as a result of increased accessibility. 4 Capturing that value requires measures that are more complex and much larger in scope than transit-oriented development.

The strategy recommended in this report is called Station Area Regeneration, or StAR. Where TOD is implemented on only the two most local geographic scales—the station itself and its surrounding area— StAR’s effects are seen beyond the station’s immediate area, extending into the city and from the city into the region. Besides its larger area of effect, StAR differs from TOD in its dependence on more factors than simply the density of land uses. An effective StAR creates or strengthens a dynamic urban center around the HSR station, serves as a gateway to the city, and connects the station to its metropolitan region. Crucial to the success of any StAR are several factors: centrality, both within the city and within the region; connectivity, to as much of the region and by as many modes as possible; incentivized development, as much to build tax base as to nourish existing and new industries; and a regional vision to ensure coordination of local efforts.

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HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

THE PROPOSED SYSTEM NY

New York

PA

(Moynihan Station) Newark, NJ EWR Airport J Metropark

Philadelphia (Market East Station)

Newark, DE

MD

Wilmington

BWI Airport

(Union Station)

VA 38

New Carrollton

Cornwells Heights

PHL Airport

Baltimore (Charles Center) Washington

Trenton

DE

NJ

kon)

SECTION 1: VISION

MA

Riverside Worcester

Boston

(South Station)

Springfield BDL Airport

Hartford

RI

CT

New Haven ISP Airport Suffolk Nassau JFK Airport

Proposed high-speed rail alignment

s

Proposed service over conventional rail lines Other Amtrak rail lines Other commuter and regional rail lines

0

50 mi.

100 mi.

N

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HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

The 2010 PennDesign HSR Studio In 2010, a University of Pennsylvania School of Design graduate studio proposed a provocative long-term solution to the Northeast’s capacity problem: Two dedicated high-speed passenger rail tracks from Washington, DC to Boston, Massachusetts. The PennDesign team devised an HSR route that utilized the existing Northeast Corridor from Washington to New York, then proceeded on a new alignment east into Long Island, north under Long Island Sound, through central Connecticut, and northeast again to Boston. The HSR route is a complement to, not a replacement of, the existing shoreline corridor through Connecticut and Rhode Island, which will also be upgraded for commuter and regional rail service.

With top HSR speeds over 200 miles per hour, and average speeds of around 150 miles per hour, these two tracks will create the necessary capacity for a fraction of the cost of expanding the use of existing modes. It will infuse tremendous capacity to the entire Northeast while bringing underperforming cities and regions into the megaregion’s economic mainstream.

Approximately half of the 888 new track-miles required will be built within or adjacent to right-of-way (ROW) that is already used for passenger rail. This includes the Amtrak Northeast Corridor from Washington to New York, and the Long Island Railroad from New York City to Ronkonkoma. About one fourth of the system will be built within or adjacent to highway ROW, notably the I-91, I-84 and I-90 corridors in Connecticut and Massachusetts, and one fifth (87 route miles in total) will be composed of new tunnels under densely developed urban areas or through irregular topography. These tunnels will not only serve to straighten curves in the current system that cannot support higher speed service, but they will also allow HSR to penetrate to the heart of the megaregion’s densest urban centers. New stations in downtown Baltimore, Philadelphia, and Hartford will exemplify the benefits of centrality that come with these subterranean approaches. The remainder of the route will be built along utility or freight rail rights of way, comprising just eight percent of the total route.

Following the release of the 2010 studio report, Amtrak came forward with its own HSR proposal for the Northeast, which differed in its proposed alignment between New York and Boston, but shared the basic service characteristics of the 2010 studio proposal. It also gave a similar estimate for the cost of such a system, with both the Penn and Amtrak reports suggesting that approximately $100 billion will be required to implement the full system.

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SECTION 1: VISION

The cost of such a system is significant, but it pales in comparison to the additional growth it will enable in the Northeast. As the national economy continues to be concentrated into America’s eleven megaregions, the benefits of such a transformational investment in the Northeast will have both national implications and regional impacts. But just as the national economy thrives and lags with the strength of its megaregions, so too does a megaregion like the Northeast depend on strong and well-linked metropolitan economies. Those metropolitan regions will be strengthened by their newfound proximity to other cities and knowledge economies.

Breakdown of the proposed system’s use of right-of-way. 6

Tunnels 20%

Freight rail 5%

Utility 3%

Highway 23%

Existing passenger rail 49%

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HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

What’s Next for High-speed Rail The authors of the 2010 PennDesign report, Making High-speed Rail Work in the Northeast Megaregion, brought the concept of high-speed rail in America’s Northeast Corridor into the public spotlight and into dialog with city and state officials and, ultimately, the White House. But as the year advanced, it was clear that there was still work to be done—more persuasive analysis was required to communicate the full benefits of HSR to the elected officials and public stakeholders across the country.

In presenting their truly transformative concept, they succeeded in accelerating the conversation and attracting input and attention from previously unexpected sources. However, that new attention has also brought a higher level of scrutiny, and has placed additional importance in completing the analysis of HSR in the northeastern United States.

This is especially true in light of dramatic changes in the nation’s fiscal and political environment—changes that many fear will be jeopardize the development of high-speed rail in America.

However, high-speed rail is a long-term solution to a long-term problem, and should not be subject to the limitations of a short-term political cycle. This fact is why it is important to anticipate the questions that will invariably be asked of any high-speed rail proposal, and to answer them in advance. This 2011 PennDesign report will answer those questions in a methodical and logical sequence.

What can HSR do for America?

Once implemented, HSR will benefit every resident or visitor in the Northeast, and the resulting economic development will present rippling benefits throughout the nation.

How do we implement it?

It is essential to create a new entity with the authority, transparency, and credibility to finance, design, build, and operate the system. Peer nations have found it especially important to carefully delegate responsibility for infrastructure and operations.

How do we pay for it?

Inseparable from how to implement it is how to pay for it, since nothing will be built or managed until the checks are signed. No funding streams currently exist for a high-impact megaproject that will truly be the first of its kind in America, so a strategy that leverages both public and private funds is necessary.

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SECTION 1: VISION

What is the metropolitan role in implementation?

Cities must prepare plans to revitalize station areas that emphasize regional connectivity if they are to bring the potential for increased wellbeing to the entire megaregion.

How do we build public support?

Every supporter of high-speed rail, whether he or she is a high-ranking official at the U.S. Department of Transportation or just a taxpaying citizen of the Northeast, has a part to play in promoting the system.

A vision for HSR in the US: Americans riding high-speed rail. 7

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HIGH-SPEED RAIL I N T H E NORTHEAST MEGAREGION: From Vision to Realit y

HSR Effect: Bilbao, Spain

SECTION 22:: THE HSR EFFECT

2. THE HSR EFFECT

SECTION OVERVIEW The Northeast Megaregion’s transportation system fails to meet mobility needs in the present and threatens to stifle economic growth and competitiveness in the future. One of the primary reasons the current system is failing is that it is out of balance; it inefficiently utilizes the individual capacity of its interstates and highways, airports, and railroads without recognizing that they can each function better as part of an integrated system. The Northeast relies too heavily on highways and airports for trips within the megaregion, which clog the system and hamper mobility. To bring it into balance, passenger rail needs to play a stronger role, in the form of high-speed rail. This mode of travel is uniquely suited for trips ranging from 100-500 miles, which corresponds directly to the geography of the Northeast Megaregion and to the transportation system of the Northeast Corridor. HSR is the best way to add capacity to the Northeast’s congested transportation system.

This section of the report describes the concept of balanced transportation and how it can apply to America’s best location for HSR, the Northeast Corridor. A proposed operations plan, the System Design Plan for NEC passenger rail service, is presented to set forth how HSR can be implemented to maximize efficiency, optimize capacity, and spread the most benefit to the most people. The Benefit-Cost Analysis demonstrates that this project is a worthwhile investment with benefits that exceed its costs by a factor of 1.38. The last section of this chapter analyzes the metropolitan and megaregional economic benefits that are not included in a conventional benefit-cost analysis, but which reveal the visionary and transformative potential of strategic investment in HSR for the Northeast.

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HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

BALANCING THE SYSTEM AND OPTIMIZING CAPACITY The NEC’s transportation system currently faces stifling capacity shortages with limited opportunities for significant improvement. The structure of the existing system, heavily reliant on highways and airports to alone support the region’s traveling needs, is failing to meet the travel demands of the present, and cannot be expanded to accommodate fully the needs of the future. The feasibility of creating new capacity to the existing highway and aviation systems, by adding thousands of lane-miles on I-95 or several new runways in the densely built-up environment of the Northeast is doubtful at best. HSR is the missing link that promises to help bring balance to the overall system, adding much needed capacity to the region as a whole in addition to both its highways and airports.

HSR can be the investment that brings to reality the concept of balanced transportation in the NEC, in which modes of access are treated as contributing elements of an overall accessibility network, rather than as stand-alone systems. The federal government should make Northeast high-speed rail a national transportation investment priority. Funding for this project should be included in the upcoming reauthorization of the Surface Transportation Act.

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There is often a long line for planes to take off from airports on the Northeast Corridor, like this one at New York’s JFK International Airport. 1

SECTION 2 : THE HSR EFFECT

The Need for a Balanced + Multimodal Transportation System In his seminal work, Transportation for Livable Cities, Dr. Vukan R. Vuchic explains that “no single mode of transportation can satisfy the diverse needs of a metropolitan area.” 2 America’s metropolitan regions, particularly those in the Northeast, face problems of economic inefficiency, environmental deterioration, deferred maintenance, and intolerable levels of congestion in no small measure because their transportation systems are imbalanced. When a transportation system is imbalanced, it relies too heavily on the capacity of one or two modes to satisfy the varied travel needs of the city or region, rather than utilizing each mode for the purposes it best serves.

For decades, our cities and our entire nation have relied too heavily on the automobile and airplane to satisfy all of our intra-city and inter-city trips, resulting in overcrowded highways and airports. While these problems are experienced largely at the city and metropolitan level, their impacts extend to the broader megaregions.

There is a high volume of short-haul flights just within the cities along the NEC, causing delays.

Boston

New York City

Philadelphia

Urbanized Area Annual Number of Flights

Baltimore Washington

40,000 30,000 20,000 10,000

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HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

Megaregional congestion also has national implications and consequences.

Congestion in New York’s airports is not merely a localized urban problem, for up to one third of all delayed flights nationwide can be directly attributed to the failure of capacity in the New York air system. 3 Our cities, regions and nation can no longer afford to view the crisis of our urban transportation networks as isolated, localized concerns. Instead, it is essential to take a comprehensive approach, understanding modes and networks in terms of the roles they play in the greater transportation system. The reality Americans now face is a system that is woefully imbalanced, and whose recalibration is the prerequisite to ensure the future social and economic success of our cities, regions and nation.

Congestion is a debilitating problem the Northeast Megaregion currently faces on the ground and in the air, impeding not just mobility but also real economic opportunity and growth. The total cost of highway congestion and lost economic productivity due to air travel delay amounts to roughly $30 billion a year in the Northeast Megaregion alone. 4 Every three and a half years we pay in metro area congestion what it would cost to build a state-of-the-art HSR network from Boston to Washington.

Studies forecast that the problem will only get worse. 5 There is therefore an urgent need to optimize the Northeast’s transportation system to alleviate current congestion and accommodate future growth.

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Currently, conventional rail is the Northeast Corridor’s current most competitive mode for travel for trips between 225 and 275 miles. 7

SECTION 2 : THE HSR EFFECT

High-speed rail is the most effective way to increase intercity capacity in the transportation system of the Northeast Corridor. While not suited for all trip types, it is the most competitive mode for those trips ranging between 100 and 500 miles in length. 6 For those trips shorter than 100 miles, the automobile is most competitive, and for those trips longer than 500 miles, air is most competitive.

Currently, we rely too heavily on the automobile and airplane to fulfill a travel demand for which they are not the best suited—trips between 100 and 500 miles—putting unnecessary strain on an already overextended system. By implementing a new mode of travel, HSR holds the promise to not only fulfill a transportation need that is not being satisfactorily met, but also to alleviate the strain on the other major modes in the transportation system, thus creating a more efficient and balanced overall network.

With HSR, the optimal mode for trips on HSR would be between 75 and 475 miles. 7

High-speed rail represents an opportunity not only to introduce a new mode into the transportation system that would assume a role not previously filled, but also an opportunity to bring balance and optimization to other existing modes, including aviation.

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Comparison of the Alternatives Aviation Historically, Philadelphia-New York has been among the routes with the most significant deteriorating performance among city-pairs with nonstop airline connections. In 1995, the average gate-to-gate time between the two cities was 58 minutes, while today, it is 75 minutes. High-speed rail could offer significant reductions in travel time, with a trip length of 33 minutes between Philadelphia’s Market East Station and New York’s Moynihan Station.

The top four most delay-prone airports in the nation are in the Northeast Corridor. Congestion in the northeast airspace chokes the economic vitality of the region and the efficient operation of the entire national aviation system. In 2007, flight delays cost the Northeast Megaregion $2.45 billion, and in 2025, the cost of flight delay is projected to grow to a staggering $7.12 billion a year. 7 If the New York region fails to increase capacity at its airports, it will forgo as many as 125,000 jobs, $6 billion in wages, and $16 billion in sales each year by the 2030s. 8 Adding aviation capacity in the Northeast faces many physical and fiscal challenges. Building a brand new airport is rare, as doing so requires enormous amounts of up-front public investment and large swaths of land in a region where land is a scarce and valuable resource.

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Expansion at crowded landlocked airports in the Northeast such as JFK in New York faces many physical and fiscal challenges. 9

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Unlike the landlocked airports of the Northeast, Denver International rests on 53 square miles of mostly open land, a land area more than twice the size of Manhattan.

The scarcity of open land in the densely populated Northeast makes expansion of aviation capacity in this megaregion more challenging than other parts of the country. 10

Denver International Airport (DIA) was built on 53 square miles of undeveloped land when it replaced Stapleton airport in 1995. To put this in context, DIA is more than twice the size of the entire land area of Manhattan. In the Northeast, there are no areas with large parcels of land available near major population centers. Expanding capacity by building new airports is an unrealistic option.

Improving capacity by expanding existing airports is untenable for many of the same reasons. The Northeast’s major airports are either land- or water-locked, with no room to significantly expand their existing footprints to accommodate more runways and terminals. Some projects are underway to reconfigure airfields to maximize and increase capacity. The FAA recently approved a Capital Enhancement Program at Philadelphia International that will create a new commuter terminal, new parallel runway and relocated UPS facility. The $5 billion program will only create enough capacity to adequately accommodate projected demand until 2035, however.

Ridership projection models built by the 2011 PennDesign studio team forecast a modal switch of 2.3 million travelers from planes to trains by 2050. Such accommodation of megaregional air travel demand on rail would free much needed capacity for more profitable long-distance flights.

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On an average weekday, there are 485 flights between the cities of Boston, New York, Philadelphia, Baltimore and Washington, DC., representing 10% of the total traffic of these airports. These are the flights that HSR has the greatest potential to replace since they represent service up and down the NEC. Sixty-nine percent of the 485 daily flights are served by regional jet or turboprop aircraft. These short-haul flights make the most inefficient use of airspace capacity in the crowded NEC, and are the types of flights for which HSR can and will substitute.

Connecting rail with airports has shown to be analogous to the development of rail links to seaports. In past centuries, ships were the mode for long distance and overseas travel while rail connected those passengers and goods to destinations further inland. In the 21 st century, aviation has taken the place of ships for fast travel and transport, and HSR can once again restore the vital link that rail has so effectively served in the past and return balance to the overall transportation system. 12

Highways According to the 2010 INRIX National Traffic Scorecard, congestion on America’s highways has continued to worsen over 2009 levels with an average travel time increase of 10 percent over the year before for most US drivers. 11 The I-95 southbound segment in the Bronx is the most congested piece of highway in the US. 12

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The Northeast in particular is suffering from crippling road congestion.

The most congested corridor in the nation is the southbound segment of I-95 in the Bronx. Of the top 10 most congested metropolitan areas in the United States, four of them are located within the Northeast megaregion, with New York, Washington, Boston and Philadelphia ranking 2nd, 4th, 8th and 9th respectively.

Severe congestion within the major metropolitan areas of the Northeast Corridor make intercity highway travel unreliable. 14

In looking at international comparisons, the United States and the Northeast in particular fare very poorly. Of the top five most congested metropolitan areas in the US, UK, France, Germany, Belgium and the Netherlands, four of them are in America and two of them—New York and Washington—are in the Northeast Megaregion. Of the top 15 most congested metropolitan areas in these countries, four are in the NEC, with Boston and Philadelphia joining the ranks. 13

Boston

Providence

New York City

Philadelphia

Baltimore Washington

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Given that the Northeast is projected to grow by 20 million people by 2050, the levels of congestion on the region’s highways will continue to significantly deteriorate without comprehensive intervention. A recent report by the I-95 Corridor Coalition suggested that annual expenditures in the $25 billion range would be necessary to avoid gridlock in the NEC by 2035. 15 The same report concluded that any further expansion of highways in the dense urban areas of the NEC would face “substantial practical and political difficulties.”

Targeted improvements can be made to I-95 and the region’s other major highways by alleviating congestion at key bottlenecks. It will be necessary to make strategic investments that may add a few lanes or make upgrades at certain intersections. Northeast HSR would add the equivalent capacity of four additional lanes to I-95 from Boston to Washington. 16 A clear and long-established responsibility of federal government is the provision of systems of mobility and access that promote interstate commerce and economic vitality. In FY 2010, the USDOT allocated an operating budget of $41.8 billion for the Federal Highway Administration and $15.9 billion for the Federal Aviation Administration. Funding for the Federal Transit Administration was much less at $10.3 billion and for the Federal Railroad Administration even more meager at only $2.7 billion. 17 Despite the number of rail passengers, intercity rail has been left behind as the Passenger Rail Investment and Improvement Act of 2008 authorized just $1.5 billion a year for five years to Amtrak. 18

FY2010 U.S. Department of Transportation Budget Allocation by Mode. 17

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The Best of the Alternatives The Obama administration has continued to state its strong support for highspeed rail, and there is no more appropriate location for this investment than in the Northeast.

HSR is the most cost-effective means of increasing connectivity between the Northeast’s major centers. It is the mode with the clear competitive advantage for providing fast, convenient and reliable connections between cities that are 100-500 miles apart. The ability to increase capacity from both a physical and fiscal standpoint is limited in both the highway and aviation systems.

The Northeast’s highway network is the nation’s oldest. Much of it is at the end of its useful life and will require hundreds of billions just to reconstruct the existing system. By accommodating the demand for intercity travel along the NEC with HSR, this will allow available highway funding to be directed to pressing maintenance costs while strategically investing in targeted capacity improvements at the most congested bottlenecks.

The Northeast’s airports face conflicts between using their limited capacity to accommodate hundreds of short-haul flights on small aircraft and the need to feed their more profitable medium and long distance flights. By accommodating the demand for intercity travel along the NEC with HSR, and integrating services through strategic code-sharing agreements, HSR can substitute these short-haul flights and free up capacity for more profitable and strategic reallocation.

The challenges of managing congestion and creating new capacity in the Northeast will only increase if significant adjustments are not made to the system. The real value of HSR investment is in the system-wide benefit it accrues by restoring balance and thereby optimizing the capacity and performance not only of rail but also of highway and air. Building HSR is not merely the provision of a new mode of transportation, it is a crucial investment in the future functionality and efficiency of the entire national transportation system.

It is clear that a Northeast HSR system is needed. But what will it look like?

How should it be planned to yield the most benefit?

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SYSTEM DESIGN The 457 route-miles of railroad between Washington, D.C. and Boston, Massachusetts are the busiest in the United States for both intercity passenger rail service and commuter rail services, carrying more than 13 million passengers in 2009 on Amtrak service alone. The addition of two dedicated high-speed lines will provide faster and more reliable service.

This addition inspires questions about how this additional capacity can be used to support a broad population of rail travelers, enabling the creation of a balanced transportation system. To create this balance, the HSR system will set new standards for operations, service and capacity, as described in the System Design Plan presented here.

The process of system design starts with a service plan that establishes where, when, and how often trains will stop. It is important for the new HSR system to have enough variety of service to thoroughly and efficiently meet the population’s different needs, but the system should also be simple enough for its users to comprehend without confusion.

The proposed service plan for high-speed rail on the Northeast Corridor will include provision for both high-speed inter-city services and high-speed commuter rail routes. This plan consists of nine distinct long-distance, inter-city stopping patterns in addition to seven highspeed commuter-oriented stopping patterns around the largest cities on the corridor. These specific services are illustrated in the chart on the following page. The proposed service plan has three tiered levels —“Express,” “Limited,” and “Regional” — which are manifested on general HSR service along the corridor, on airport-centric special service, and on service that leaves the proposed HSR corridor across Long Island east of New York’s Moynihan Station and continues on the existing Northeast Corridor to serve the coastal route to Boston. During the morning and the evening rush, the seven commuter-style high-speed rail services will also feed into the largest cities on the corridor.

Tiering the services means that the stops of each service level are a subset of the stops of the next-slowest stopping pattern. Thus, there are first-tier cities at which the Express, Limited, and Regional trains all stop, second-tier cities at which both Limited and Regional trains stop, and third-tier cities at which only Regional trains stop. There are also airports at which only airport trains stop, and cities in which only commuter trains stop. For example, the proposed Express service would stop only in the Northeast’s most populous cities—Boston, New York, Philadelphia, and Washington, D.C. Travel between these cities is already extensive, and, for the non-adjacent cities in the region, often undertaken by air. To be fast enough to be competitive with air travel, there must be a service level that takes passengers between these cities with no other stops.

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Proposed System Map

A second-tier of service, the proposed Limited service, would stop at all the cities at which the Express service stops, and would also stop at medium-sized cities located between the large cities: Baltimore, New Haven, and Hartford. A third tier of service, the proposed Regional service, serves all the stations that the Express and Limited trains serve, and also stops in smaller cities along the corridor, such as Worcester, Massachusetts; Trenton, New Jersey; and Wilmington, Delaware. The tiers of service were determined by current and predicted ridership, city population size, and origin-destination pair analysis.

In addition to the tiered stopping patterns for general high-speed rail along the corridor, the service plan also calls for three specialty services: airport-oriented services that will run throughout the day and stop at airports along the corridor in addition to cities on the Limited and Regional tier, a coastal service, which will depart the new corridor north of New York City, and high-speed commuter services on weekday mornings and evenings, as described below.

• Airport Service: The aim of the airport service is to help relieve short-haul-flight-related congestion at the corridor’s airports.

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• The proposed airport stopping pattern would allow airline passengers to forgo short-haul flights to major airports and instead take the train—and thus it could also encourage air-rail “codesharing” as currently seen with Continental Airlines and Amtrak at Newark Liberty (EWR).

• Coastal Service: The purpose of the coastal service is to provide those who live in the coastal cities, such as Stamford, CT and Providence, RI, which are currently served by existing Northeast Corridor service, access to high-speed rail with a one-seat ride connection to the rest of the Northeast HSR system. The highspeed rail vehicles could not achieve their highest speed on this section of track, but with recommended upgrades to achieve a state of good repair, the trains would be able to travel faster than current trains travel on that section of the alignment today.

Further, cities with coastal service would have more frequent higher speed trains than they do today.

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• High Speed Commuter Service: Finally, the proposed service plan recognizes the need for high-speed commuter service that would serve the largest cities on the corridor. These trains would not run the entire corridor, but serve the commuter sheds of the most populous cities. Their stopping patterns are unique in that they stop more frequently as they approach the cities they serve, to better meet the commuter market’s demand.

The capacity of the corridor permits a schedule with peak-hour service that sees 22 trains departing every 104 minutes, with 20 distinct stopping patterns—15 long-distance trains and seven commuter trains. The 104-minute schedule repeats throughout the day, with most long-distance trains making ten trips each and the commuter trains making four trips per day—two during the morning peak, and two during the evening peak.

The Philadelphia/New York high-speed shuttle would make twenty trips a day. With the recommended schedule, during peak hours, there would be 15 trains between New York and Philadelphia every 104 minutes, which averages out to over eight trains an hour.

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PROPOSED SERVICE PLAN Travel Times Under this proposed service plan, on an Express train…

• It would take 34 minutes to travel between New York and Philadelphia.

• It would take 1 hour and 7 minutes to travel between Washington, D.C. and Philadelphia.

• It would take 1 hour and 39 minutes to travel between New York and Boston.

• It would take 3 hours and 28 minutes to travel between Washington and Boston.

On Amtrak’s existing Acela service….

• It currently takes 1 hour and 12 minutes to travel between New York and Philadelphia.

• It currently takes 1 hour and 28 minutes to travel between Washington, D.C. and Philadelphia.

• It currently takes 3 hours and 45 minutes to travel between New York and Boston • It currently takes 6 hours and 45 minutes to travel between Washington and Boston.

Full timetables demonstrating the capacity of the corridor and based on the described service plan are shown in Appendix A. Though this schedule is fully operable and feasibly possible, it is not the initial schedule recommended – demand at this level does not exist at this time. Although the demand for service at this high frequency will not exist at the outset of the high-speed rail program, it is important to note that service at this level of capacity is achievable on the alignment, and moreover, it is achievable with a service plan that has so many different levels of service. The system’s tremendous capacity to handle growth in ridership on the Northeast Corridor makes it an investment not only for the present and not just for the near future, but also for the end of the 21st century and beyond. Careful and detailed system design demonstrate that high-speed rail will be part of an integrated system that will enable the Northeast Corridor to fully realize the potential benefits of a balanced transportation system.

BENEFIT - COST ANALYSIS Implementation of Northeast high-speed rail will transform the economic geography of the megaregion. Achieving this transformation however, requires a major public investment. Like any significant capital investment, the feasibility of the project must be justified before a decision is made to move forward.

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There are various ways to evaluate the feasibility of a complex infrastructure project like high-speed rail. Financial analyses, like the one found in the Phasing, Financing and Funding section of this report, track a project’s potential expenses and revenues to determine its profitability and financial return for investors. Financial analysis does not, however, track the benefits and costs of a project to society at large. Among these, in the case of high-speed rail, are benefits to transportation users, including the value of travel time saved, reduced congestion on the roadways, and increased economic activity in cities served by high-speed rail. These are all benefits that should be captured and therefore merit another type of evaluation.

The tool frequently used to evaluate these factors, particularly for large-scale public investments, is the benefit-cost analysis. This type of analysis can paint a picture – and in this case a positive one – of the results that can occur from such a capital investment by capturing the factors that benefit the public. Although in numerical format, it provides an explanation of the relationship between the benefits and cost of the investment. This benefit-cost analysis demonstrates that Northeast Corridor high-speed rail will generate substantial external returns totaling $71 billion in discounted return on investment (ROI), which would benefit both riders and society as a whole.

The report presents this methodology and results behind the benefit–cost analysis for HSR in the Northeast and how this analysis could be applied to other high-speed rail projects as compared to NEC HSR. It also analyzes whether the project is viable by ascertaining whether the public achieves a certain level of benefit relative to the cost of the project. The approach to the benefit-cost analysis completed by 2011 PennDesign studio team differs from the 2010 studio report, which compared an investment in high-speed rail in contrast to other modes of travel. The 2011 team based their analysis on the notion that an investment in highspeed rail is not an alternative to other transportation modes, but is the missing link to creating a balanced transportation system in the Northeast Corridor.

The benefit-cost analysis that the 2011 PennDesign Northeast HSR studio conducted demonstrates that these returns far exceed the costs, calculated at $52 billion, to reflect a benefit-cost ratio of 1.38 when discounted at seven percent over a 40-year period. This positive ratio suggests that high-speed rail could be justified as an appropriate flagship project for the Northeast, and demonstrates that public investments in this project will yield a sizable and demonstrable positive return to society.

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This compares the large investment cost over the long time horizon during which high-speed rail will be built and operated.

High-speed rail could achieve the benefits of a balanced Northeast transportation system by providing additional capacity, shifting inter-city passengers to a more efficient mode of transport and reducing pollution and fuel expenditures while creating travel time savings for passengers.

In 2035, ridership projections based on total demand for inter-city travel throughout the Northeast Corridor, show that there will be approximately 30 million passengers. Without high-speed rail, approximately 27.2 million of these riders would be driving, 2.3 million of these riders would be flying and 1.3 million would be riding conventional rail. The detailed methodology of ridership projections can be found in the Financial Viability chapter.

Methodology & Results Because of the impact that this project and investment would have on the public, this year’s studio completed a benefit-cost analysis that only looked at the impact of the project on society, excluding producer benefits like ticket revenues. The analysis considers the project costs for construction of the infrastructure as well as benefits for the entire Northeast Corridor, from Boston to Washington, projected on a 45-year time horizon, with operations commencing in 2020.

Northeast Corridor high-speed rail saves: 3 million tons of carbon monoxide 3,500 lives 2.9 billion hours 5.4 billion gallons of gas 4.3 billion dollars of highway maintenance

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Benefits (billions)

Nominal $278.1

Discounted (7%)

20.6

4.0

110.2

23.0

Environmental Sustainability

31.1

9.0

Residual Asset Life

28.5

2.0

$468.4

$71.8

102.3

52.0

$102.3

$52.0

Safety Maintenance Economic Competitiveness

Total Benefits

$33.0

Costs (billions) Construction Costs Total Costs

The categories and standards that the United States Department of Transportation uses to evaluate Transportation Investment Generating Economic Recovery (TIGER) projects have been applied in this analysis where applicable. These categories include Economic Competitiveness, Safety, Maintenance, and Environmental Sustainability, Residual Asset Life and Capital Costs. The standards call for discounting costs and benefits at seven percent. The complete analysis is presented in spreadsheet format in the Appendix of the report.

Metrics The following metrics were used to evaluate and conclude that the benefits of high-speed rail are worth the cost.

Economic Competitiveness The direct benefits to transportation users of the proposed high-speed rail system are quantified through time saved from reduced travel time. In the time that they would have otherwise been traveling, leisure travelers could have more time to spend with family. Business travelers could be spending more productive time at the office or in meetings. The value of time saved for passengers in door-to-door travel time was estimated for those passengers that shifted from car, conventional rail, and air travel.

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Time saved is valued, at $40/hour for business travelers and $23/hour for commuter and leisure travelers, averaged and applied to a weighted average to the travel minutes saved because of high-speed rail along the corridor. A total time savings of $23 billion, when discounted at seven percent, contributes to enhanced productivity and greater efficiency, both of which could contribute to the Northeast Corridor’s new economic geography.

Safety The effects that the reduction in costs associated with car crashes could have on the benefit of high-speed rail to the public were also evaluated. Using projected ridership figures, high-speed rail will capture approximately 27 million passenger trips along the Northeast Corridor in 2035. By applying the cost of each type of accident per vehicle miles traveled, this shift will yield a $2.6 billion in savings from value of lives saved, $513 million in property damage avoided, $29 billion in injury crashes prevented and $842 million in savings from prevention of fatal crashes.

Maintenance of Northeast Corridor Highways Transportation forecasts from the I-95 Coalition and others predict that significant capacity expansions will be needed in the Northeast’s highway network to meet the mobility needs of the growing population throughout the megaregion. By removing current and future travel demand from the Northeast’s highways, high-speed rail will reduce the need for expensive and invasive expansion. The additional capacity that HSR will provide over the next 40 years represents the equivalent of adding four new traffic lanes, at a total cost of $2.9 billion to I-95 during the same period. The assumption made in this analysis assumes that these new lanes would be constructed in 2025 and 2035. Maintenance of these lanes will also be avoided and therefore the savings benefit of $1.3 billion has been included to account for saved maintenance costs every seven years through 2065.

Environmental Sustainability The number of passengers making the transition from driving, riding conventional rail and air to HSR could, in turn, produce external environmental values for society that can be monetized. For example, reduced car trips will yield net environmental benefits in the form of reduced emissions, saving over $1 billion. In addition, reduced car use will also lead to a significant fuel savings of $8.7 billion among drivers.

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To accurately account for emissions from train operations, the cost of emissions on society is also included at a cost of approximately $2 billion and is netted out from the positive benefits associated with high-speed rail. This reflects an increase in costs of $623 million.

Residual Life of Assets The analysis includes a line item for costs associated with the residual value of the asset at the end of the project life. This includes rolling stock, station, guideway and right of way costs. The saved value to the public amounts to nearly $2 billion.

Costs

$

Costs of construction must also be weighed against the benefits. Building two new, dedicated tracks along the entire segment of the Northeast Corridor requires infrastructure costs that will be incurred during the first eight years from project commencement. The CBA accounts for capital costs, including construction, overhead, environmental mitigation, existing corridor upgrades and rolling stock through 2035. Operations were excluded because revenues from ticket were not included as producer costs. The proposed network will cost approximately $103 billion to build, but will follow a phasing plan through 2035.

Analysis The positive 1.38 benefit cost ratio demonstrates that high-speed rail in the Northeast Corridor is worth its investment even without taking into account its wider economic, social and environmental benefits. By optimizing travel modes, the Northeast can balance capacity, improve existing infrastructure and mobility, and provide enormous benefits to both users and non-users of a vastly improved system.

BENEFIT - COST ANALYSIS Lessons Learned from Europe Benefit-cost analyses are commonly used to evaluate the merits of large public works projects.

Experience in other countries has shown, however, that traditional benefit cost analyses do not capture all of the easily measured economic benefits that HSR systems can provide. In the United Kingdom, for example, the benefit cost analysis completed for the proposed High Speed 2 route from London to Manchester resulted in a positive benefit-cost ratio. But it was the additional difficult-to-measure benefits that fell outside this analysis, in particular the expected economic transformation that this project would enable in the Midlands and North of England - that convinced the new British Conservative coalition government to proceed with this project.

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However, Northeast HSR could provide specific advantages that need to be considered and described to provide stakeholders and the public with a comprehensive understanding of the full impact of HSR. The benefitcost ratio is only a basic measure and a first step towards achieving stakeholder buy in. The benefit-cost analysis and the economic impact analysis below should be examined in conjunction to further demonstrate that the implementation of high-speed rail is necessary for balancing the Northeast Corridor’s transportation system.

The wider economic benefits, such as jobs created and other increased economic activity such as new tax revenues, are difficult to quantify, but provide additional benefits to users. To show these benefits, the 2011 studio team looked at the qualitative economic impacts on regional development patterns to reflect the comprehensive array of benefits of integrating HSR into the existing NEC transportation system.

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Retailers benefit from foot traffic at St. Pancras Rail Station in London. 18

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WIDER ECONOMIC BENEFITS Conventional benefit-cost analyses, including this one, do not include the evaluation of the economic impacts of transport infrastructure projects on the all-important potential for regional development patterns. In the UK, the government’s chief advocate for HSR and head of the equivalent of the USDOT, Lord Adonis, achieved approval for HS2, high-speed rail service between London and Manchester. It was cited as the most costeffective way to improve essential rail service and, more importantly, to serve as the economic catalyst for spreading economic vitality from London to the English Midlands cities. This project is the only one continuing ahead in the face of strong political will marshaled in the current government reducing public spending and public debt. It is the economic development potential of HS2, not its mobility, that has won this exceptional support. 19 In the US, informed politicians have praised the importance of highspeed rail as an economic development tool; State representative Richard Geist of Altoona, Pennsylvania, for example, describes high-speed rail as “an economic generator first, a people-mover second.” 20 In pursuing proof of this statement and others like it in the United States, many studies have sought to quantify the broad range of economic benefits that come with this infrastructure investment, at the scale of the city, megaregion and the nation.

However, as high-speed rail has come to fruition in a large number of foreign countries but not in America, these studies are limited by the amount of information available and the complexity of factors that contribute to economic advancements, so they only begin to scratch at the surface of potential economic benefits generated by high-speed rail.

As described in the first section of this report, America’s Northeast megaregion is an economic powerhouse that contributes much more than its proportional share to the US economy. Its current population and workforce deliver a whopping contribution of $2.6 trillion in GDP (20% of the nation’s GDP), and its geography puts that well-prepared workforce in relatively easy reach of multiple metropolitan areas. 21 Several major service and manufacturing industries in the Northeast, including the bio-medical, pharmaceuticals and financial services industries are positioned throughout the megaregion.

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As with HS2 in England, HSR on the Northeast Corridor could expand labor markets serving these industries, strengthening the synergies between the economies of individual metropolitan regions, and in effect, create a new economic geography for the whole megaregion. It could promote larger economic agglomerations cross the Northeast as well as specialization in individual cities and regions, as has been the experience in European and Asian countries that have built HSR. It could also spread well-being to the economically weaker cities of the megaregion.

By calculating the positive impacts that high-speed rail will have on these new economic geographies, one can more accurately weigh the investment returns against the investment costs. The difference between an economic impact analysis and a benefit-cost analysis is that benefit-cost analysis not only reflects real monetary costs or income changes but also quantifies other non-monetary values such as public safety, where no actual transfer of money takes place. Economic impact analysis, on the other hand, refers to changes in business productivity that result from enhanced market access and business agglomeration.

A Spatial Understanding of Economic Acitvity In 2006 the United Kingdom Government commissioned a study of the impact of transport decisions on the economy and the environment of the UK. Although the Eddington Transport Study 22, by Sir Rod Eddington, made recommendations that were not in favor of high-speed rail, the report did highlight important micro-economic drivers through which transportation investments promote economic performance and which go beyond the parameters of a benefit-cost analysis. These drivers include: 1. Increasing business efficiency through time savings and improved reliability for business travelers, freight, and logistic operations.

2. Increasing business investment and innovation by supporting economies of scale or new ways of working.

3. Supporting clusters and agglomerations of economic activity.

4. Improving the efficient functioning of labor markets, increasing labor market flexibility and the accessibility of jobs.

5. Increasing competition by opening up access to new markets.

6. Increasing domestic and international trade by reducing the costs of trading.

7. Attracting globally mobile activity by providing an attractive business environment and good quality of life.

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Healthcare industry agglomeration in the Northeast Megaregion.

The combination of creating economies of scale and the decrease in trade costs from close proximity encourages firms to locate closer to one another. The clustering of complementary businesses results in the formation of larger markets provides many fiscal advantages.

It allows for knowledge-sharing, more efficient linkages of services and products, and it encourages the grouping of common labor pools.

These gains are referred to as agglomeration benefits, which lead to the increased productivity of each participating business. Consequently, the total wealth of the Northeast megaregion will be lifted by the increased productivity of industry agglomerations. 23 The economic impact of HSR in the Northeast Megaregion is also attributable to the expanded access to labor and markets that comes with the compression of time and distance.

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For cities served by HSR, the accessibility to larger labor markets within the megaregion will pull previously isolated regions into the sphere of stronger economies.

The Metropolitan Role section of this report will explain both these effects in greater detail and discuss how faster connections between firms and individuals in cities and regions in the Northeast will ensure the economic prosperity of the megaregion. This section presents case studies of currently operating HSR networks in Europe where these HSR economic effects have already been documented.

HSR will transform accessibility and economic activity in the Northeast Megaregion in two ways. First, it will increase urban and economic agglomeration, whereby cities, firms and industries gain market power and wealth by locating in proximity to each other. Second, it will expand access to new labor and housing markets though reduced commuting times, thereby spreading wealth in the megaregion.

Increased Wealth High-speed rail will promote economic activity around the Northeast’s train stations, increasing property values and density within a 15-minute walk of these stations, much as is the case for transit-related developments in city centers and at other dense employment locations.

However, HSR also has a larger, metropolitan reach. In the Northeast’s five major metropolitan regions, the benefits of HSR will extend across these broader regions around extensive transit networks which provide either one-seat rides or travel times of up to 30 minutes from the HSR station. These locations will benefit from the opportunity for more faceto-face contact, increased interaction of similar businesses and increased access to a larger labor market, which will result in higher productivity and greater economic growth. 24 Business productivity (which is defined as the ratio of output/cost ratio for business operation) will also increase in these places, where the benefits from agglomeration, including economies of scale and economies of scope, will benefit both large and small firms. Economies of scale enable greater divisions of labor and therefore greater specialization, which will reduce costs of production.

When economies of scope are achieved, savings are realized from the production of related products in close proximity to one another.

HSR will reinforce current specializations in the Northeast and help the megaregion to compete both nationally and internationally. Key specializations in the Northeast include the financial service sector in New York; biotech and pharmaceutical research and development in 70

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Philadelphia high-speed rail commuter shed.

Boston, New York, New Jersey, Philadelphia, and Baltimore; government operations in Washington, D.C.; and health care and education in Boston, New York, Philadelphia and Baltimore. 25

Increased Mobility and Market Access Increased mobility and market access create new opportunities for both businesses and workers. For businesses, access to a broader and more diverse labor market means greater resource choices. For workers, access to larger, more productive metropolitan areas within a one-hour trip means greater work choices. A megaregion-scale economy, connected by high-speed rail, will allow both large and small cities and regions to share in the Northeast’s wealth and economic opportunities.

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C ASE STUDY

HS2 In the UK: Changes in Wages, Employment and Economic Output In 2010, Greengauge 21, a British not-for-profit public-interest group, released a report describing the economic impacts that the development of a national high-speed rail network could have on national economic outcomes in the United Kingdom. The report included an economic forecasting model produced by KPMG. The study examines long-term economic benefits that development of proposed high-speed rail links from London to cities in the Midlands and North of England would bring to these under performing places. The report looks at a proposed network with a northwest route from London to Birmingham, Manchester, Glasgow and Edinburgh and a northeast route from London to Stansted, Nottingham, Sheffield, Leeds, Newcastle, and Scotland. To appraise the full potential of this network, KPMG used 2040 as the forecast year to calculate the additional jobs and output that could occur in the economy in that year. The assumed reductions in journey times between key cities in the UK after the completion of the high-speed rail network, provides new opportunities for business-to-business connectivity across the country that would substantially transform the way that these cities do business.

The KPMG analysis suggests that enhanced connectivity from high-speed rail could boost the wages for the average job by around one percent in 2040. This is the result of increased competitiveness as businesses gain access to the national market and increased specialization from the concentration of complementary economic activities. Specialization enables a business to improve its products, reduce its costs, earn higher profits and therefore offer higher wages. From this one percent wage increase, KPMG estimated that high-speed rail could support growth in average wages of £409 (2009 US$ 650) per annum, create an additional 25,000 jobs and have an overall national gross value added (GVA) of approximately £16.9 billion (2009 US$ 26.9 billion) per annum by 2040.

Three main components constituted the total GVA calculated by KPMG. The first represented changes in productivity within business sectors and accounts for 64 percent of the total modeled impact. It is based on the link between rail connectivity and average wages, which captures the benefits of business time saving, agglomeration and specialization. The second impact comes from increases in employment driven by these increases in wages. By driving up wages and output, improved productivity attracts people into the labor market to fill new jobs created in the supply chain. Lastly, the third component comes from the relocation of jobs to areas that benefit the most from high-speed rail – cities. Direct connections between city center stations will make cities more attractive business locations as high-speed rail can effectively bring together skills and connect to companies across a very wide area.

The KPMG analysis presents evidence that the development of high-speed rail in the U.K. could have a significant impact on jobs, wages and output. Moreover, as companies become more efficient in a nationally competitive market, a high-speed rail network may reshape the nation’s economic geography by supporting the growth and concentration of the productive centers of the core cities in formerly under-performing areas of the country. 27

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Geographic Economic Impact of HS2. 27

Business travelers in UK. 27

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C ASE STUDY

AVE in Spain: Transformations at the local level • Zaragoza lies midway on the Madrid – Barcelona AVE line, about 300 kilometers from both cities. The new AVE station is located at the edge of this compact city, about two kilometers from the center.

• As with other countries, Spain has always had some cities that have been major crossing points or intermediate cities in major transportation corridors. Zaragoza, which sits between two major economic hubs, Madrid and Barcelona, has gained importance as a distribution center for goods via motorways. In recent decades, inter-metropolitan air transport has weakened the city’s role as a passenger meeting point. High-speed rail, however, has helped turn this around. The network has reinforced the role of intermediate cities for intermetropolitan passengers and helped to establish a more polycentric system of cities. High-speed rail travel time has opened up commuting possibilities for those living in Zaragoza and has increased relations between businesses in small and large cities. Once the high-speed network is fully built out in Spain, Zaragoza will be an hour and a half trip from four of the five biggest Spanish metropolises – Madrid, Barcelona, Valencia and Bilbao.28 • High-speed rail can be a powerful driving force for economic growth. However, it is not a silver bullet. In order to capture its potential each city must develop a plan that enables social and economic regeneration to occur. The opening of the Zaragoza high-speed rail station in 2003 led to a remarkable restructuring of the city’s rail structure and facilities and significant changes to its urban structure. Before the construction of the new high-speed rail station, the city had to relocate freight facilities to the south of the city, which freed key areas in the center of the city. A city master plan was drafted and developed to coincide with the arrival of high-speed rail. The master plan was focused on developing the area around the AVE station as a major location. In particular, the plan outlined the development of the 2008 Exposition Fair site – an opportunity for the city to show its clear commitment to increasing its international exposure. Complementing this, the development also included hotels, conference and leisure facilities and a substantial residential area.

• Following the exposition, the master plan proposed a series of strategies that were aimed at promoting urban, economic and social change.

One of the strategies that is associated with the transformations generated in the city is the “Digital Mile” project. This project seeks to take advantage of urban development in regenerated areas and establish places of intense activity and interaction between knowledge-based industries. As part of this strategy, Zaragoza buried some stretches of track to re-stitch the urban fabric and also relocated certain pieces of railway infrastructure that are now in disuse. Taking advantage of existing infrastructure, Zaragoza also improved the integration of the rail within the city. This, in turn, permitted the city to capitalize on the station’s central location to reinforce the structure of the central part of the city and to recover degraded neighborhoods around the station. This facilitated new development in and around the station and increased densities, which have attracted many businesses to relocate to the city. Essentially, the high-speed rail train was the impetus for urban regeneration, acting as a tool in redeveloping not only the station surrounds, but equally the physical and functional structure of the city as a whole.29

Regeneration around Zaragoza Station. 30

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The Town of Montabaur, Germany experienced an increase in access to labor markets and an increase in gross added value (left). High-speed rail line from Frankfurt to Cologne, passing through Montabaur (right). 34

C ASE STUDY

Deutsche Bahn in Germany: Increasing market accessibility The Cologne-Frankfurt German high-speed rail line was constructed between 1995 and 2001. The line is part of the Trans-European Network and facilitates train velocities of over 180 m/h. The track reduced travel times between the two metropolises – Frankfurt and Cologne – by more than 55 percent and connected two small towns – Montabaur and Limbaur – to the new line.31 These towns that were previously peripheral locations are now central locations with respect to two of the major regional economic agglomerations with a total population of approximately 15 million. An empirical study was conducted in 2010, to determine the economic effects of connecting physically and economically isolated towns to larger regional economies, thereby increasing their accessibility to labor markets in the region.

The two-part study identified the magnitude and timing of the intervention of high-speed rail and tests whether improvements in accessibility significantly explain the economic growth during the adjustment period. The results of the first investigation of the study depicted positive adjustment in GDP levels after 1998, three years after the start of construction. In those three years, a minor increase in GDP was revealed and in 2002, when the new line was put into operation, a plateau in GDP was reached. From these results, the adjustment period was considered to be between 1998 and 2002. This period also aligned with considerable investment around the new line in anticipation to an expected increase in location productivity.32 The results of the study provide compelling evidence for an increase in economic activity within areas that gained access to regional economies, especially underperforming areas, following the availability of a high-speed rail line. Specifically, the study found that a one percent increase in market access lead to a 0.27 percent increase in GDP and that within the three counties closest to the intermediate stations – Montabaur and Limburg – there was a five percent increase in market access with high-speed rail.33 To confirm the correlation between growth in GDP and change in market access the study tested and ruled out other possible determinants of growth. Lastly, the economic adjustments found were tested for their persistence - whether the new high-speed rail led to a permanent shift in economic activity. Tests were repeated for a period prior (1995-1998) and after (2002-2006) the adjustment period (1998-2002).

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In other words, HSR in the Northeast would enable underperforming small- and mid-sized cities to be pulled into the economic orbit of larger metropolitan areas, thereby expanding housing opportunities for residents of larger cities.

HSR can also create employment opportunities for residents of smaller cities and can improve the economic competitiveness of all cities in the megaregion. In addition, by creating more spatial interactions between large economic agents and peripheral regions, spillover effects may occur, resulting in a reduction of poverty in underperforming cities.

For underperforming cities such as Hartford in Connecticut, the labor market size will increase by 419 percent. This access expansion allows businesses to employ workers with the skills that are more suited to available jobs. For those living in cities with limited job opportunities, increased access means being able to find work without relocating. This will be especially important to two-income households. However, for cities to capitalize on the wealth and vitality that can come with HSR services, thoughtful planning that catalyzes HSR’s full economic potential is critical.

Quantifying the Wider Economic Impacts of HSR The time and space compression that will occur with the introduction of high-speed rail in the Northeast megaregion will have many quantifiable economic impacts, as discussed previously. Therefore before investment, it is important to conduct an analysis of the potential impacts of highspeed rail that accounts for indirect and induced economic spending, the societal benefits associated with access improvement and the increased productivity that businesses within the Northeast Megaregion will experience as a result of clustering. The inclusion of these additional benefits will a reveal a more accurate measure of the benefits of highspeed rail.

Direct and Indirect Spending Direct spending, which includes both the capital investment in and the operations of high-speed rail, will support short-term construction jobs and longer-term operations jobs. According to the American Public Transportation Association, every billion dollars of average spending on transportation will produce 36,000 jobs. However, along with direct

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Economic Impact Total economic impact of public transportation in the United States.

Per $ billion of Average Spending on Transportation

Jobs (Employment)

36,100

Output (Business Sales)

$3.6 billion

(GDP (Value Added)

$1.8 billion

Labor Income

$1.6 billion

Tax Revenue

$490 million

spending impacts are indirect and induced effects that lead to broader impacts on the economy. Indirect effects include jobs created in supplier industries from increased sales.

For example, the parts required for the construction of high-speed rail will generate jobs in the industries that fabricate those parts. Induced effects, on the other hand, are the increased retail sales that will occur as a result of increased surplus spending money from the new wages of construction and operations workers and the growth in wages for workers at supplier industries. These business sales are estimated to be $3.6 billion per billion dollars of public transportation investment.

Access Improvements Access improvements lead to mobility benefits in terms of access to work, school, health care, and, or shopping destinations. Access benefits translate into increased worker productivity enabled by access to a broader and more diverse labor market and the creation of economies of scale enabled by access to a wider customer market. Currently there are disparities in access to transportation across different income, disability, and geographic subgroups. A lack of personal mobility has resulted in such economic consequences as unemployment costs, reduced tax revenue and higher welfare and medical costs. Therefore, by increasing both individuals’ and cities’ access to labor markets, high-speed rail will contribute to bringing about social and geographical equity to the Northeast Megaregion.

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For businesses, the benefits of increased access to labor and consumer markets provide the incentive to cluster at high-speed rail nodes. By locating close to high-speed rail nodes, businesses will have access to a larger and more diverse labor market, providing them with a better capacity to find workers with the desired skills, thereby enhancing labor productivity.

Additionally, trade and service sector establishments will be able to access broader customer bases, allowing them to more efficiently arrange locations and resources to serve customers. These benefits can take place across a broad spectrum of metropolitan areas. The magnitude of this effect is estimated first by considering the extent to which higher public transportation usage stimulates higher metropolitan density and then by assessing the extent to which higher effective density translates into economic productivity.

Productivity from Agglomeration HSR supports economic growth through the concentration of economic activity and the clustering of offices, shop, entertainment centers and other land uses around HSR stations. Such clustering activity may provide increased efficiency through increased interaction with similar businesses, reduced labor cost, improved communication, and lower infrastructure costs.

Business density or the relocation of related business sectors in close proximity to one another provides an opportunity for more face-toface contact and more knowledge sharing. Reduced labor costs come from increased access to a specialized workforce which often follows business clustering patterns, that is to say, areas with a larger cluster of information industries are most likely to have a larger clustering of information workers. Improving economic linkages between organizations encourages the alignment of workforce training institutions, labor, businesses and suppliers resulting in a more efficient regional economy.

Additionally, high-speed rail will reduce wage premiums paid to attract workers to more-congested areas with higher travel times and costs.

Wage premiums are a pass-through effect in which employers in highly congested areas absorb some of excess costs of worker commuting to attract and maintain quality workers. High-speed rail service can facilitate higher levels of metropolitan population and employment density,

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which, in turn, can allow a metropolitan area’s economy to become more productive. By reducing congestion in the cities, businesses reduce their wage premiums. The cost savings to business is therefore an increase in business productivity as the output of the company stays the same but the cost of operation diminishes. (This impact is assumed to apply to roughly 30 percent of the congestion cost savings.)

The Importance of a Regional Plan It’s often hard to see the future. But the city of Bilbao, Spain has over the last decade demonstrated to the world that it is more than possible to replace a fractious political geography with a productive regional economy. Since the turn of the 21 st century, Bilbao has become a tourist destination and a growing industrial region, well linked by transit that connects residential centers and employment sites.

High-speed rail has not yet come to Bilbao, but already, even as HSR route plans are being proposed, the political and business leaders are gathering to create a vision for their region. “Bilbao 2010: The Strategy,” is a plan that stakes the city’s future on joining the ranks of localities in the global world where value is created, and on being an attractive city for people with ideas and a city committed to projects of innovation.

The document, which was drawn up by the Association Bilbao Metropoli-30, with the Fundación Metrópoli orchestrating collaboration among more than 300 experts, affirms that Bilbao and its metropolitan area need to join forces in a new thrust for modernization so as to project the Bilbao as an international world-class city in the new Knowledge Society. 36 The European Diagonal, a chain of five major metropolitan regions stretching from Lisbon to Milan, encompassing Madrid, Barcelona and Marseille and a constellation of smaller cities. With high-speed rail the European Diagonal has the potential to enhance its megaregional function through linked economies, mobility systems, natural resources and cultural traditions. 37

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Over the last 10 years Bilbao has moved from a situation of rationalization to one of innovation. For the next 10 years, “The Strategy” will guide Bilbao’s metropolitan areas in taking the hardest step: moving into action. Strategy 2010 is founded on three basic elements: people, activities and the appeal of the metropolis. And at their core, as a supporting structure and strategic reference, lie innovation and knowledge.

People Bilbao Metropoli-30 has the knowledge and the Plan is made by and for people. For high value-added business initiatives to take shape it is necessary for the role of leaders to be reinforced in developing Metropolitan Bilbao and to design mechanisms for training, keeping and attracting professionals.

Activity in the City High value added business activities are the motor force of the metropolitan system. To encourage these activities a suitable environment must be created providing immediate Internet access, support policies for innovative initiatives and the creation of intelligent infrastructures (IT systems, equipment for laboratories and areas of research, etc).

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Bilbao’s urban transformation projects around the high-speed rail station. 37

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The Appeal of the Metropolis The Association Bilbao Metropoli-30 starts off from the premise that the city is a vital space, an inhabited place that must be livable, where the priority is to shape an environment in which human beings may find an atmosphere conducive to harmonious development where the personal and the social come together in solidarity. The visionary plan for the Bilbao region is an inspiring example of thinking ahead to capture the benefits of HSR to an emerging economic geography. 36

CONCLUSION High-speed rail alone will not solve the economic challenges facing Bilbao or the capacity problems constraining the Northeast and the other 10 American megaregions. After all, no single mode can fulfill all of the diverse travel needs of a metropolitan area or megaregion. A significant investment through HSR can however, provide much needed balance to the overall transportation system, enhancing the operational performance and capacity of the transportation system and bringing the performance of the megaregion’s economy up to its potential.

By identifying all the benefits of HSR addressed in this section, it becomes clear that the high cost of HSR in the NEC is far outweighed not only by the accessibility benefits this system will provide to the Northeast but also by the decades-long economic prosperity it will help to bring to the Northeast and the nation as well.

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United States Capitol Building 82

SECTION 3: INSTITUTIONAL INNOVATION

INSTITUTIONAL INNOVATION SECTION OVERVIEW A new single-purpose public benefit corporation (PBC) should be established to finance, design, build and manage Northeast HSR and associated activities in the Northeast Corridor. This PBC must be designed in such a way that it is able to gain the support of the Congress, the Northeast states and cities, the public, and the investment community.

Amtrak should then assume the same role in the Northeast as it has in the rest of the country, as the operator of intercity and high-speed passenger trains. The Penn studio team has investigated a range of institutional models for financing, designing, building, and operating HSR and other major infrastructure systems both in the United States and in Europe. The goal of this research has been to: •

Develop a clear understanding of the shortcomings in providing infrastructure and service operations for all rail services in the Northeast Corridor.

•

Determine the institutional framework most capable of implementing high-speed rail in the Northeast megaregion.

•

Outline how new project construction will interact with achieving state of good repair improvements on the existing Northeast Corridor.

•

Analyze how Amtrak could fulfill this role or otherwise participate in a new management and operating structure.

•

Investigate options for accelerating the NEPA process and mitigating other regulatory impediments that could increase project cost and add political risk to the project.

Designating the Northeast as a HSR corridor is vital, but establishing a responsible managing body is the crucial next step in making HSR a reality. Realizing one of the most visionary infrastructure projects in our country’s history will require a governance structure capable of matching grand ambition with purposeful action. Accountability, transparency, and long-term responsibility will be essential elements to win the confidence of investors, legislators, and the American public.

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A Short History of Northeast HSR Proposals In 1962 Senator Claiborne Pell proposed the creation of a high-speed rail route in the Northeast corridor between Boston and Washington, D.C., in what would have been the world’s first HSR route. Since then, however, proposals for improved rail service in the Corridor have fallen short of Pell’s vision. Amtrak was established in 1971 to operate passenger rail services, primarily over existing, privately-owned rail freight lines. Then in 1976 Congress transferred the Northeast Corridor to Amtrak, along with its billions of dollars in deferred maintenance expenses. This required that Amtrak repeatedly make requests for funding from Congress to bring the NEC to a state of good repair. Congressional appropriations have fallen short of these needs, however, and the Corridor continues to have billions of dollars in deferred maintenance needs, limiting its utility both for commuter rail and intercity rail services.

Although Amtrak’s Acela trains are capable of 150 mph service, commuter rail congestion and the Corridor’s outmoded tracks, power systems, bridges and tunnels have limited average travel speeds to little more than half of that. They have also undercut Amtrak’s on-time performance. Under-investment in the Corridor continues to hamper efforts to make necessary investments to achieve both state-of-good repair on the “classic” rail functions and the high-speed services. For much of Amtrak’s history it has been a political football between the two major parties, with Democrats strongly supporting the need for a national passenger railroad, and Republicans repeatedly calling for its abolition.

Meanwhile, Amtrak is forced to pull together and operate both financially viable rail service in the Northeast Corridor as well as long-haul services across more sparsely populated regions of the country.

Amtrak’s role as the owner and operator of the Northeast Corridor has also been at odds with its role as a provider of national passenger rail service on a largely privately-owned railroad system in the rest of the country.

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1962 High-Speed Rail Proposed

1976 Amtrak Acquires Tracks

Senator Claiborne Pell advocates for high-speed rail in the Northeast Corridor

Congress transfers NEC infrastructure and burden of deferred track maintenance

1956 Federal Aid Highway Act

1971 Amtrak Created

90-10 funding split between the federal and state/local government

National Railroad Passenger Corporation created for intercity travel in the United States

SECTION 3: INSTITUTIONAL INNOVATION

Amtrak Routes 1

Faced with recurring budget crises since its creation, and the political necessity of sustaining very unprofitable long-distance trains in much of the rest of the country, Amtrak has been distracted from the goal of creating HSR service in the Northeast. For much of the last decade, in response to a congressional requirement that Amtrak strive for financial self-sufficiency, it has had to divert hundreds of millions of dollars per year of net profits from NEC operations into its long-distance train services.

Amtrak is now strongly committed to designing, building and operating HSR in the Northeast. In the fall of 2010, following the release of the Penn Studio HSR Proposal, Amtrak proposed creating its own “Next Generation� Northeast HSR service.

2005 SAFETEA-LU Congress releases a plan for balanced intermodal funding, shift from highway-focus

2000 Acela Service Begins Intended to go 150mph, slowed by poor engineering decisions and old technology, the trains average 78mph

2010 Amtrak Vision for HSR Amtrak releases Next Gen report envisioning true high-speed rail on the NEC

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In April 2011, Amtrak requested $1.3 billion from the Federal Railroad Administration to begin engineering and environmental reviews for this project. It has also created a new HSR division, led by one of the nation’s leading high-speed rail engineers and staffed by top rail engineering experts.

Predominant model in the Northeast Corridor: Infrastructure and operations are manged by the same party.

The question now is whether Amtrak, as currently constituted, can gain the support from the Congress and the investment community to obtain the necessary funding to complete its proposed Next Generation HSR vision for the Northeast. The political challenge has increased with the capture of the House of Representatives in 2010 by the Republicans.

Congressman John Mica, Chairman of the House Transportation and Infrastructure Committee, has gone as far as calling Amtrak a “Sovietstyle train system.” Since any funding authorization for Northeast HSR would need to be approved by Mica’s committee, this does not bode well for an Amtrak-led initiative.

Further, most of the rest of the world has moved to a different organizational structure to finance, design, build and operate HSR systems. The European Union has mandated a separation of rail management from operations, and requires “open access” to HSR and other corridors to ensure competition in rail services. Additionally, the EU has created a series of loan and other financing instruments which encourage the creation of P3s to implement HSR services.

ADVANTAGES of INFRASTRUCTURE SEPARATION and OPEN ACCESS As part of a concerted effort to integrate national economies in the spirit of the European Union’s Trans-European Network transportation (or “TEN-T”) legislation, the EU Rail Commission has developed standards for interoperability and for the identification of prioritized projects across the EU. The investment arm of the EU, the European Investment Bank (EIB), has provided grants and loans to fill a crucial gap in projectspecific funding, as have the European Union’s Cohesion Fund and European Regional Development Fund (ERDF).

Implementation within countries, however, has been the responsibility of national infrastructure companies, sometimes housed within the umbrella of a national railroad such as France’s SNCF or Germany’s Deutsche Bahn, but often as an independent actor capable of receiving funds and leveraging private financing. The EU has required that management of the HSR infrastructure be separated from running trains on these tracks.

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European Convention: Infrastructure and operations are managed by different parties.

SECTION 3: INSTITUTIONAL INNOVATION

This separation has been successfully implemented in France, Belgium, Germany, Spain, the UK, and other countries, allowing efficiency gains to be realized by having a clear focus on two distinct business models.

In Spain, for example, the former national railroad, RENFE, was broken up into two separate companies: ADIF, which owns and manages the rail assets, and a reconstituted RENFE which operates HSR and other trains.

ADIF fills the role of infrastructure manager, entering into concession agreements and joint ventures to implement national rail projects, maintain public railways, and works with municipalities to ensure that the necessary investments are made at the local level to realize the full potential of HSR. By contrast, as noted above, the UK is meeting the same goal by creating separate public benefit corporations, reporting directly to the national Department for Transport, to manage each of its new HSR routes.

Many of the arguments for “unbundling� infrastructure from services in the US are the same ones that motivated this successful transition in Europe, namely because it opens the market up to other private or public operators and also allows the national railroad to function commercially, improving financial transparency and accountability. The experience in Europe suggests that areas where infrastructure separation makes the most sense are where neutrality of access is important to encourage competition on the same tracks, and where it is necessary to separate support costs due to a mix of funding sources. The Northeast Corridor, with its megaregional character, multiple users, and high-density traffic can benefit from infrastructure separation.

Open access promotes competition by allowing multiple operators to offer services. Here, a Dutch HSR train and Deutsche Bahn ICE train are coupled for joint service. 2

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European Union

National Government

(EU Rail Commission)

Infrastructure Manager

Construction

P3

(Cohesion Fund, ERDF)

Train Operator

Joint Venture

In addition to opening up private funding sources, it would help optimize capacity and help eliminate the perception that Amtrak receives preferential treatment. This type of entity currently does not exist in the United States, although there are numerous regional transportation and transit authorities formed to create continuity across municipal and state lines. While the USDOT and FRA set broad policy goals for HSR and provide HSR grants and loans to states, there is no entity at the interstate level that can manage multi-state HSR corridors, such as the Northeast Corridor. A megaregion-scale authority in the Northeast Corridor capable of filling the role played by ADIF at the national level in Spain is the most important institutional innovation required for implementing highspeed rail.

European Case Studies in Institutional Design In March 2011, the PennDesign Studio conducted a week-long HSR workshop in Madrid, Spain in which leading planners, engineers, railroad professionals, and scholars from Europe and the United States worked with studio participants to develop the findings and recommendations included in this report.

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European Investment Bank

The European model for separation of infrastructure and operations.

SECTION 3: INSTITUTIONAL INNOVATION

Studio team members also conducted site visits to HSR projects in five European countries, and met with the principals responsible for designing and managing these projects. The following profiles summarize the findings of this European research in three case studies: Spain’s ADIF, Germany’s Deutsche Bahn, and Britain’s HS1 project.

Corridor-Specific Public Benefit Corporation: Britain’s HS1 Ltd The 2010 PennDesign HSR Studio looked extensively at Britain’s HS1 and HS2 projects to understand the financial and political commitments of high-speed rail. In March 2010, the Studio conducted a week-long HSR Workshop in London with British and Americans HSR experts to learn from Britain’s experience in developing its national HSR system. The UK DfT is in the process of developing the country’s HSR network by establishing a series of public benefit corporations, each one of which is responsible for financing and developing one of Britain’s HSR routes.

HS1 is the completed HSR network linking the Channel Tunnel and St. Pancras Station in London.

The UK model is an example of a corridor-specific public benefit corporation.

UK Government

Congress, USDOT, FRA

Canadian Pension Funds (100% Shareholders)

HS1 (Infrastructure Manager)

Track Maintenance Agent

Real Estate Agent

Private Operators

Utilities Agent

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Studio team members met with the UK Transport Secretary, Lord Andrew Adonis and other top Department for Transport (DfT) staff responsible for making the decision to proceed with HS2, the proposed route between London and Manchester, which was announced to Parliament during the 2010 visit.

High-speed passenger rail service between London and southeast England, originally called the Channel Tunnel Rail Link, was initially financed primarily by the private sector. Ultimately, overly optimistic ridership projections and insufficient government involvement created too much risk for private investors to handle alone, and the UK Treasury was forced to provide a guarantee for the entire project in the form of government backed bonds and risk support. Through this series of complex restructurings, the UK government was able to provide stable operations, offering international and domestic high-speed service by forming HS1 Ltd. The entity hired an agent to manage the tracks, provide neutral dispatching for multiple private operators, and coordinate the development of stations and utilities. In return, HS1 Ltd. charges access fees to operators to generate a profit.

After three years of government-ownership, the Treasury assumed the remaining debt from the HS1 balance sheet, thereby making the stably operating business more attractive to investors. In 2010, two Canadian pension funds, Borealis Infrastructure and the Ontario Teacher’s Pension Fund, purchased a 30-year lease for the right to collect the system’s surplus revenue by operating and maintaining the track infrastructure and stations.

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High-speed Javelin commuter trains operated by Southeastern connect Ashford to London. 3

SECTION 3: INSTITUTIONAL INNOVATION

With the sucess of HS1, the UK government announced the start of public consultation for HS2 in February 2011. 4

By completing the project with public funds, the government in turn recouped 40 percent, or £2.1 billion of its initial £5.8 billion capital investment through this first concession. Future concessions will continue to pay back the initial government investment, providing a way for the private sector to reimburse the public for building the tracks.

HS1 was seen as so successful, that in March 2010 the UK government announced its intention to proceed with HS2 by forming HS2 Ltd. While opportunities for some private investment in rolling stock and/ or station developments are being considered, to date, HS2 Ltd. has not announced what the structure might look like. The approach to upfront high-speed rail funding reflects the changed circumstances both in the United Kingdom and globally, in which private investors can no longer be expected to take on the high construction costs and risks associated with building HSR infrastructure.

The primary lesson learned from HS1 for the Northeast Corridor is both how – and how not – to structure P3 investments. The restructuring of the project underscored the need for the government to minimize construction and market risk. The UK government financed completion of the project because it understood the importance of the project in speeding HSR connections to the Continent and its potential to revitalize underperforming cities in Kent and the Thames Gateway. It also became one of the key investments required to accommodate the London 2012 Olympics, which are focused on the Stratford HSR Station on HS1 in East London.

In 2012, the Javelin service will transport visitors to the Olympic games at Stratford, East London. 5

While the HS1 institutional model has many positive characteristics, it does not provide a solution for bringing existing tracks up to a state of good repair, within the context of the Northeast Corridor. And because the UK does not have a national operator, it cannot explain the role of such an entity in the United States. However, we can still apply the UK model to construction on the NEC. Congress could authorize creation of a new public benefit corporation and provide it with a mix of grants, loans and tax credits needed to design, build and manage the initial operation of the classic and HSR portions of the NEC. Upon demonstrating the ridership and financial viability of the project, this entity could lease the track ten years at a time, starting with the Philadelphia-New York piece in 2025.

As demonstrated by HS1, this approach requires upfront government investment and patient capital (i.e. pension fund capital). From there, the government will continue to renew these concessions ten years at a time, completing the remaining segments, Washington to Philadelphia, and New York to Boston in 2035.

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The concessions to the private sector will mean that the government will only need to stabilize operations for a few years and then can pass on the responsibility to operate and manage the track infrastructure to the private sector. By doing so, a significant portion of the government’s upfront investment in the corridor would be recaptured by the USDOT or US Treasury.

National Railway Holding Company: Germany’s Deutsche Bahn In the early 1990s, the German National Railway was struggling. Burdened by growing deficits, high labor costs, and a cumbersome administrative structure, the German National Railway faced a declining market share and an increasing need for government subsidy. High levels of political influence led to poor investment decisions and a backlog of deferred maintenance, while civil service employment guarantees made personnel expenditures alone exceed total sales.

The solution to this problem was Railway Reform, an initiative to streamline the system through the separation of business lines. Under this process, an umbrella holding company (Deutsche Bahn AG) was created with a series of semi-autonomous divisions: Infrastructure, long-distance operations, regional operations, cargo, real estate, and even energy generation. The national government is the 100 percent owner of Deutsche Bahn AG stock, although the company was designed to allow for additional shareholders and privatization in the future.

Independent Rail Regulator

Deutsche Bahn is an example of a national railroad holding company.

German Government (100% Shareholder)

Federal Railway Fund

Deutsche Bahn Inc. (Holding Company)

DB Tracks

(Infrastructure Manager)

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DB Energy

DB Real Estate

DB Cargo

DB Regional Operator

DB Long Distance Operator

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Deutsche Bahn trains and infrastructure are owned and operated by two separate divisions.

To reduce the Railway’s high cost burden, a government agency known as the Federal Railway Fund was established to assume its bad debts, including its high personnel costs. Employees of the National Railway became employees of Deutsche Bahn, but their pension and civil service benefits were assumed by the Federal Railway Fund. This allowed Deutsche Bahn’s new divisions to operate competitively while retaining the institutional knowledge of its workforce.

These reforms brought large-scale improvements. The market share of rail in Germany increased dramatically, investments in the rail network were tripled, and the separation of divisions created streamlined business models and financial transparency. The long-distance and infrastructure divisions have become self-sufficient, the real estate division generates substantial revenues from retail leasing, and the cargo division has expanded into a multi-modal logistics company. Because of its costprofile, regional rail services still require an operating subsidy, although this market has been opened to competition by the German states. Here, Deutsche Bahn’s regional division competes with foreign rail operators such as Keolis for the best combination of cost and service.

However, the lessons from German Railway Reform are not all positive.

The integration of Deutsche Bahn’s divisions under a common holding company creates some efficiencies, but it also promotes favoritism and cross-subsidy. Deutsche Bahn’s energy division, for example, has been accused of providing favorable pricing to its operating divisions to discourage competition, which has led the European Commission to launch an anti-trust investigation against the company. Additionally, Deutsche Bahn AG has aggressively pursued international expansion in an effort to improve its balance sheet, and has funded this expansion partially by transferring funds from its infrastructure division to the holding company.

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In some areas, this has led to the deterioration of the national network and has contributed to several service disruptions. Overall, the German model is one of an entrepreneurial quasi-public company, with streamlined operating divisions that provide operational and financial efficiencies. At the same time, the lack of a formal separation between these divisions, particularly between infrastructure and operations, creates other inefficiencies that limit the optimal use of the system.

Autonomous National Infrastructure Manager – Spain’s ADIF When the EU issued Council Directive 91/440/EEC on the Development of Community Railways, Spain and other nations were required to separate the management of rail infrastructure from train operations.

Until this point, both track and passenger services had been the responsibility of the Spanish national railway, RENFE, which had been operating since 1941. In response to EU directives, Spain created a separate division of RENFE, the Gestor de Infraestructuras Ferroviarias (GIF) in 1997 to build and manage new high-speed projects as outlined in the national rail plan.

The Spanish model is a national infrastructure manager completely separate from the operator.

Spanish Government (100% Shareholder)

RENFE

ADIF

(Train Operator)

(Infrastructure Manager)

Future Private Operators Construction P3

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Telecom P3

Utilities P3

Real-Estate P3

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GIF managed high-speed rail construction and maintenance until 2005 when RENFE underwent restructuring under the Railway Sector Act of 2003. This law, which went into effect in 2005, split RENFE into two entirely separate corporations, Administrador de Infraestructuras Ferroviarias (ADIF) which took over infrastructure management and high-speed projects previously overseen by GIF, while train operations were continued under the banner RENFE-Operadora. Existing rail debt of €7.92 billion was split so that €1.38 billion was taken on by RENFEOperadora, €1.09 billion was taken on by ADIF, and the remainder remained with the State.

As the nation’s rail infrastructure manager, ADIF oversees the construction of new lines, manages existing lines and stations, and is responsible for traffic management, slot allocation, and collecting fees from train operators on a policy of neutral access. ADIF has full authority over its property and assets, enabling it to reinvest earnings into new projects such as a 12,000 km fiber-optic network, retail developments in large stations, and joint ventures for real-estate development with cities such as Zaragoza. Today the company employs over 14,000 people and holds over €20 billion in assets.

The Spanish national infrastructure manager (ADIF) was split from the national train operator (RENFE) in 2005. 7

Although breaking with decades of tradition, by shifting to solely passenger operations, RENFE-Operadora has thrived, earning approximately €2.5 billion in annual revenue.

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The company restructured into four business units based on type of service: Medium distance services, long distance and high speed services, freight, and rolling stock manufacture and maintenance. Although open access allows private operators to enter the market, the lack of crossnational links, and RENFE’s established position has allowed them to remain the dominant operator in the nation.

The Spanish model allows for an open market in which separate entities are accountable for distinct lines of business. Both the infrastructure manager and the train operator are able to capitalize on their respective expertise, leading to an efficient and transparent provision of services while generating opportunities for new growth.

Case Studies in Review These models from Europe offer valuable insight into how to implement high-speed rail in the United States. HS1 illustrates how an entity can be project-specific and how government involvement can lead to private sector investment, while ADIF provides a model for a governmentowned corporation capable of lucrative public-private partnerships and that manages both new projects and existing infrastructure systems on a national scale. Alternatively, Deutsche Bahn highlights the advantages and disadvantages of attempting to manage both passenger services and infrastructure management within the same company. Both the German and Spanish experiences provide lessons for national railway reforms.

Managing high-speed rail in the northeast can benefit by drawing on European examples, but successful implementation will require an institutional design oriented to the specific conditions in the Northeast megaregion.

Unique Context of the Northeast Corridor The Obama Administration has proposed a vision for US high-speed rail in which 80 percent of Americans will have access to this new mode. Of all the FRA’s designated corridors, the NEC has the greatest potential for implementing successful and potentially profitable HSR. Three of the HSR corridors proposed by the Administration – the California, Texas and Florida corridors – lie within a single state. Although Florida has now declined to proceed with its HSR project, California is moving forward with plans for its statewide HSR system and Texas has requested planning funds for a Houston-Dallas HSR route.

However, the remaining HSR corridors are all multi-state corridors, and three – those connecting New York City to Montreal, Buffalo to Toronto, and Seattle to Vancouver – are international corridors.

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(A fourth international corridor would involve extension of the Canadian corridor linking Quebec City with Windsor and Ontario to Detroit.) The US does not currently have interstate entities, other than Amtrak, that can finance, build and operate these projects.

Any authority that would assume this role in the in multi-state corridors, but specifically the Northeast, would need to overcome the following challenges:

Eight governors and the Mayor of Washington, D.C.: Deval Patrick (MA), Lincoln Chafee (RI), Dan Malloy (CT), Andrew Cuomo (NY), Chris Christie (NJ), Tom Corbett (PA), Jack Markell (DE), Martin O’Malley (MD), Vincent C. Gray (D.C.) 8

•

Gap in authority - Although the FRA and national policymakers have laid out a plan in broad brushstrokes, there is no authority at the multi-state level solely responsible for management of the NEC.

•

While the newly established Northeast Corridor Infrastructure and Operations Advisory Commission (henceforth referred to as “the NEC Advisory Commission”) can coordinate state policies concerning the corridor, it does not have the authority to take on management of both “classic” rail and HSR in the Northeast. A single party must be in charge of project management and final delivery to establish clear accountability and overcome parochial interests.

•

Lack of financial transparency - Cross-subsidies between business units under the Amtrak corporate umbrella make it difficult to determine accurate costs and benefits associated with the corridor. Precise knowledge of rail performance and investment in maintenance will be required to formulate and execute a detailed business plan.

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Fragmented corridor ownership - The corridor runs through eight different states and the District of Columbia on a route that is dominated by commuter rail traffic. Plans for two new dedicated HSR tracks will be implemented over a long time horizon requiring that some key pieces of the existing corridor, especially in the South End segment between New York City and Washington, be shared by both conventional and high-speed trains. Failing to acknowledge the priorities of other operators will create conflicts and constrict capacity, jeopardizing effective implementation of HSR.

•

Unfocused state buy-in - Diverse and often conflicting interests at multiple levels of government and across jurisdictions make coordination a highly complex undertaking.

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MBTA Amtrak ConnDOT MTA

•

State DOTs and transit agencies have only limited interest in Multiple owners in the NEC can lead to intercity rail and see the existing Corridor as a zero-sum game, in conflicting priorities. 9 which improved intercity service can only happen at the expense of state operated commuter rail service. Additionally, elections or other unpredictable changes in the political climate can introduce new risks that might upend long-term plans, as was recently seen in New Jersey with the last minute cancellation by a new governor of the already under construction ARC Hudson River passenger rail tunnel. Taken together, these qualities create a tremendous amount of political risk and uncertainty that can impede the process of implementing HSR from moving forward and discourage private investment. Overcoming these built-in hurdles will be crucial in creating an environment in which high-speed rail can be financed and built.

CRITERIA for a SUCCESSFUL SOLUTION The studio team investigated a broad range of options for governance of Northeast HSR, including interstate compacts, federal agencies, and public benefit corporations.

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A preferred alternative would ideally possess several key characteristics to be effective: •

The lead agency for HSR will need to be able to take a long-term outlook, pursuing a specific objective over the course of decades while maintaining focus regardless of political shifts.

•

It must also work with diverse stakeholders operating in the region to ensure fairness in phasing state of good repair efforts and high-speed rail projects. Commuter railroads, states, localities, and citizen groups will need to be engaged in this process to obtain political buy-in for the creation and continued operation of this entity.

•

The agency must employ top experts in high-speed rail planning, engineering, finance and project delivery to minimize project delay and ensure that benchmarks for implementation are met. Many of these experts may transfer from Amtrak’s very talented HSR and Northeast Corridor planning and engineering groups. These people must be able to seek out innovative solutions, negotiate effective partnerships, and expedite the permitting process.

These key personnel will not only ensure that the entity builds institutional memory over time, but also be able to carry out a business plan.

•

The agency must have the ability to gain the confidence of the Congress, the Administration, and the states, and to attract both public and private funds and to sustain this support over decades.

•

The agency must also be accountable for the accomplishment of a clearly-defined mission.

POWERS REQUIRED to IMPLEMENT HSR The current political climate has led to calls for cutbacks in services and government agencies across the board. These are often accompanied by claims that the private sector solutions are better situated to provide efficient services to the American people. While private sector talent has an important role to play in the construction of large infrastructure projects, past experience in the US and abroad emphasizes that government involvement is required to manage long-term political and financial risk to draw in private investment.

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To effectively implement HSR in the NEC, the lead entity must have the ability to: •

Engage in partnerships for co-investment

•

Generate revenue

•

Capitalize its assets and reinvest profits

•

Issue bonds and borrow from both public and private sources

•

Manage planning, design, approvals, and the EIS

•

Acquire and assemble land

•

Manage public relations

•

Oversee infrastructure construction and management

•

Act as underlying owner of infrastructure and stations

THE NORTHEAST CORRIDOR SYSTEMS AUTHORITY (NECSA): PROJECT MANAGER for the NORTHEAST Having examined alternative structures through research and discussions with HSR managers and experts in both the US and Europe, the 2011 PennDesign studio has reached the conclusion that a structure drawing on the best practices of other systems would expedite the financing, construction and operation of HSR in the Northeast. For this reason the studio is recommending that a public benefit corporation, the Northeast Corridor Systems Authority (NECSA) be established under the US Department of Transportation.

Generate revenue

Engage in partnerships for co-investment

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Issue bonds and borrow from both public and private sources

Capitalize assets and reinvest profits

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This would be very similar to the institutional model used by the British government to build its HSR system, in which a dedicated PBC is established for each high-speed route, and like Spain’s ADIF, NECSA would manage both existing infrastructure and new construction projects, albeit on a regional, not national scale. Under this approach Amtrak would transfer its Northeast rail infrastructure assets to NECSA, but would retain the responsibility for operating passenger rail service, including Acela and Regional trains in the Northeast. It is highly likely that many of Amtrak’s highly skilled engineers, technicians and rail professionals would also be transferred to NECSA, as has been the case in European countries where a similar restructuring of former national rail systems has been achieved.

Amtrak would pay trackage fees to NECSA, as it does to Class I railroads in other areas of the country. NECSA would receive necessary funding from the Congress to complete preliminary engineering, design and environmental reviews, as well as service, phasing, and financing plans for both the completion of restoration activities outlined in the current NE Corridor Master Plan and the proposed new NE HSR system.

Concurrently, as these documents are being prepared and reviewed, NECSA would make a request to the USDOT and Congress for the necessary capital funds, including grants, loans, and tax credits needed to complete restoration of the existing corridor and development of new HSR rights-of-way. When all funding, permits and approvals are in place, it could proceed with financing and construction of the NE Corridor improvements according to one of the plans described in the Financial Viability section of this report.

NECSA will possess all the necessary powers required to effectively implement HSR in the NEC.

The primary mission of NECSA upon its creation would be to carry out the vision of two dedicated high-speed tracks in the Northeast Corridor connecting Boston to Washington, D.C., while at the same time completing restoration of the existing “classic” rail corridor.

Oversee infrastructure construction and management

Acquire and assemble land

Manage planning,design, approvals, and EIS

Manage public relations

Act as underlying owner of infrastructure and stations

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Its responsibilities would include acting as the lead agency for the environmental review process, applying for federal funds from the USDOT, and structuring any partnerships necessary so that it can effectively manage the design, engineering, and final construction of the project.

In addition to day-to-day management, NECSA would work with the FRA to revise crash standards to allow for modern, lightweight train sets which have become the standard worldwide. With assistance from the newly established NEC Advisory Commission, NECSA would perform public outreach and generate a Memorandum of Understanding between the states to streamline the EIS. Finally, it would also be responsible for designing a phasing plan for HSR implementation and make use of its eminent domain powers to engage in corridor preservation efforts.

Unified ownership under NECSA will provide a steady revenue stream for recapitalization and optimized capacity.

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Infrastructure Consolidation and Maintenance To carry out this proposal, ownership of the existing NEC rail infrastructure would be transferred to the USDOT, which will in turn transfer it to NECSA. Legacy debt associated with these assets would be split between Amtrak, NECSA, and the USDOT. This would improve Amtrak’s balance sheet and allow it to focus on passenger services.

Implementation of the NEC Master Plan, which calls for improvements to the existing NEC and a return to a state of good repair, would be undertaken by the new corporation in parallel to the construction of the new HSR infrastructure. NECSA would be responsible not only for receiving federal funds for corridor improvements, but also for charging access fees to rail service operators on a neutral access basis, creating resources to pay for ongoing maintenance.

FREIGHT IN THE NEC

The system design proposed in Section 2 calls for regular service along the conventional-speed lines through western Massachusetts. While Amtrak owns the tracks from Hartford as far north as Springfield, the 50-mile stretch between Springfield and Worcester is owned by CSX Transportation, one of the nation’s largest freight railroads. Private railroad companies aren’t obligated to run passenger services along their lines, but they are all required to respect Amtrak’s right to operate interstate services; in this case, Amtrak runs one train per day in each direction between Boston and Springfield en route to Chicago. In order to run passenger service in western Massachusetts, the entire line must be double- or even triple-tracked, electrified, and signalized using the latest technology--a considerable expense that CSX is unlikely to undertake alone. These investments are as necessary for reliabilty as they are for safety: lightweight passenger trains will not meet current safety standards for surviving crashes with longer, heavier, and slower freight trains. Additional tracks ensure that slower trains can get out of the way of faster ones, and Positive Train Control (PTC) will stop any train automatically before it gets too close to another train on the same track. Installation of PTC is already mandatory for all Class I railroads--including CSX--by 2015.

However, it is rarely in a freight railroad’s interest to invest in passenger capacity, as this is a far less lucrative source of revenue than long-haul freight, and NECSA should be uniquely qualified to resolve this issue. It could, of course, simply purchase the tracks outright, but this would prove costly and would put NECSA in the freight business, which is not its intended purpose. Instead, NECSA could inherit Amtrak’s statutory rights as an interstate passenger carrier along with its legacy infrastructure. It could then enter a joint venture with CSX just as it would with any utility or real estate company that would share the right of way. As part-owner, NECSA could lay new track, electrify the line, and even assist in installing new signals from which CSX would benefit as well. To offset these expenses, CSX would grant NECSA 100 percent of returns from station leasing and passenger facility charges, provided there was a guarantee against the undue obstruction of freight traffic. It should also be noted that CSX is no stranger to sharing its lines in Massachusetts: as many as 25 commuter trains each day already use their line between Worcester and Boston.

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It is important that the access fees cover the cost of maintenance at a level that encourages market initiative and investment by Amtrak and other operators. Any profits that the infrastructure corporation would generate from the existing infrastructure above maintenance costs could be reinvested as start-up capital for subsequent phases and reinvestments in the high-speed corridor. Additionally, NECSA would use federal funds to acquire segments of the existing corridor owned by the states of New York, Connecticut, and Massachusetts, to integrate corridorwide dispatching and bring the NEC under neutral, unified management.

In exchange for parting with their rail infrastructure, these commuter services will have their segments prioritized in state of good repair efforts, leaving them with better passenger service and a reduced financial burden over the long-term.

The Role of Private Sector Entities (“P3s”) NECSA would also enter into one or more “P3s” (public-private partnership agreements) with private entities to build and manage, or handle dispatching on the Corridor, as outlined in the finance section of this report. It could also lease the existing and future infrastructure to private entities that would take over its maintenance role in return for availability payments or part of the access fee revenue, an option also discussed in the finance section. Finally, by entering into joint ventures with municipalities, regional bodies, rail operators, and private developers, NECSA could also engage in real-estate development and station management plans to generate additional revenue while preparing cities to capitalize on high-speed service.

After expanding passenger operations to North Wales, Chester, and the South of England, Virgin executives stressed the importance of partnerships with business, tourism, and regional organizations in developing new rail services at a recent media event. 10

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NECSA would also be able to negotiate partnerships for utilities running parallel to high-speed tracks within the rail right-of way including fiberoptic cable, electric transmission lines, and natural gas pipelines. These revenues would supplement other P3s to provide passenger services, maintenance, dispatching and communications or other services in the Corridor.

Advantages of this Organizational Structure The advantages of this approach lie in the specialization of the entities involved in the process and the delineation of risk to entities that are most capable of handling it. NECSA would take on the existing NEC, consolidate its ownership, and be charged with maintaining it without public subsidies beyond the cost of bringing it to a state of good repair.

It would also be responsible for permitting and political risk. Some of the construction risk and maintenance of the infrastructure could be passed to the private sector. Additionally, NECSA would begin to generate profit from its inception that could be used to fund the start-up costs of the NEC Master Plan and HSR implementation. Partnerships with states and cities for station management would allow it to share control over local decisions and generate funding for the project while allowing the local entities to decide if they want to implement value capture or other mechanisms.

11

A Process for Designating the Northeast Corridor HSR Corporation Previous sections of this report have described why a new entity is required to implement high-speed rail at the megaregional scale and how it will function, but before this concept can move forward, NECSA will need to be created. The USDOT currently lacks the authority to create a new PBC directly, so an act of Congress would be required to implement these recommendations. This legislation would grant the FRA the authority to establish NECSA and provide it with all of the powers needed to carry out its responsibilities. (A similar process could also be used for other multi-state and single-state HSR projects.)

12

Amtrak’s Future Role Separating the management of the Corridor’s infrastructure from train operations is a significant shift from the status quo in the NEC. This is because in contrast to other areas of the country, Amtrak owns the vast majority of the rail infrastructure in the Northeast in addition to having a monopoly on intercity passenger service.

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Amtrak conductor on Northeast Regional. 13

Upon the creation of NECSA, Amtrak would assume the same role that it has in the rest of the country, as an operator of intercity and HSR services. This was the role in the Northeast originally envisioned by the Congress when it was established in 1971. Transfer of the existing corridor from Amtrak to NECSA would relieve Amtrak of much of its legacy debt and allow it to reemphasize its focus as a national intercity rail company dedicated to high quality passenger services.

Creation of this new entity would also provide for a clear delineation of roles for the new NEC Advisory Commission and the FRA. The Commission will be responsible for advising Amtrak on maintenance standards and service levels on both the “classic” rail and HSR tracks in the Corridor. It could also facilitate the transfer of state-owned segments of the Corridor to the new Corporation. The FRA would be responsible for approvals of financing strategies, safety standards and major P3 agreements, but it would relinquish responsibilities for environmental reviews and other permitting requirements to NECSA. It will be important that a seamless transition be made from Amtrak to NECSA for management of the corridor’s infrastructure assets and that the skills of Amtrak’s workforce not be lost in this transition.

The experience in Europe has been that when national rail companies have gone through similar transformations, many of the highly skilled engineers, managers and other rail professionals have moved to the new entities established to plan, develop and manage rail infrastructure. A similar process should be established in the Northeast to ensure that Amtrak’s skilled workers are able to make this transition to the new entity.

Pay scales and benefits for these workers should be maintained, but work rules and traditional practices that have undercut the productivity of Amtrak’s workforce should be renegotiated as this transition occurs.

While one of the guiding principles driving the formation of NECSA is opening the corridor to multiple operators, Amtrak will realistically 106

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maintain a monopoly on inter-city services in the short-term due to their entrenched presence and many years of experience in the NEC. Additionally, because many of its founding employees will have a background at Amtrak, NECSA likely still have personal ties with the national railway and shared priorities in the early years. This will not only aid in creating an air of cooperation instead of animosity and allow NECSA to help advocate for the importance of passenger rail to national mobility and competitiveness.

ENVIRONMENTAL IMPACT STATEMENT The institutional innovation of creating a new public benefit corporation will not only answer questions of governance concerns but also those of process. The creation of NECSA alleviates Amtrak’s burden of working with the FRA to undergo the environmental impact statement (EIS) across eight states and Washington, D.C. At the project level, each state can stipulate that its EIS formula and components be used. As a lead agency with a megaregional focus, NECSA will be a clear facilitator that can streamline much of the EIS process.

As it stands now, implementing high-speed rail in the Northeast Corridor will entail a long and expensive process of environmental review, including at least three years for the environmental impact statement.

If recent projects are any indication, the process will most likely be a lot longer given the large and diverse number of parties affected by the project. In Maryland, the purple line EIS is at six years and there is not a record of decision yet. In fact, the New York City to New Jersey Access to the Region’s Core (ARC) tunnel project started its EIS in 1999 and did not have a record of decision until 2006, only to be stopped in 2011 by the governor of New Jersey. 14 Every year of delay costs money and adds to the risks that projects will not reach completion.

For high-speed rail to be implemented in the Northeast Corridor, the lead agency is required to fulfill the process mandated by the National Environmental Protection Act (NEPA). NECSA, together with the FRA, can expedite the design phase by streamlining the EIS process and by using applicable categorical exclusions where possible. Effective management of multi-agency coordination can also be a powerful tool.

It is important that this opportunity not be lost in an unnecessarily tedious, laborious process that puts bureaucracy ahead of common sense.

NECSA, along with the FRA, can convene project stakeholders to resolve questions and confusion before parties unnecessarily oppose high-speed rail.

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A well-managed NEPA process is a forum for better transportation planning and sound decision-making, aligning environmental value with action.

As the EIS is underway, NECSA must address the agency actions required immediately after the EIS process is complete to smooth the transition from record of decision on to design and construction. Preserving the corridor required for the project and using new communication technologies for interagency and agency-citizen exchange can improve and expedite not only the EIS but the next stages of the project as well. The Spanish policy of “preserving the corridor”, once a project is approved, even before land is acquired, prevents additional development that would provide new obstacles to project implementation.

The EIS can be used to identify which agencies and authorities are stakeholders and provide opportunity for their voices to be heard. The combined voices of NECSA and FRA must be both objective and clear, supporting high-speed rail and focusing the analysis and public dialog on substance, impacts, and outcome rather than on process.

Fundamentals of the NEPA Process There are three levels within the NEPA process: categorical exclusion, environmental assessment, and environmental impact statement. The process is completed by a lead agency, cooperating agency, and the Council on Environmental Quality (CEQ). 16 Each agency has its own tailored version of the NEPA process with different components in their EIS. The Environmental Protection Agency (EPA) also checks whether the project is in compliance with air quality standards and recommends any noncompliance be further reviewed within the CEQ. With a project such as high-speed rail, which spans the territories of numerous agencies, an improperly managed NEPA process could take over 5 years.

Additionally, as the agencies may have overlapping jurisdictions, there can be multiple cooperating agencies. The two main considerations within the HSR EIS are what the alternatives are (no build, and other scenarios) and the role of the public comment opportunities. The role of the FRA (supported by NECSA) is critical at this stage: to hold all parties accountable and to ensure efficient sharing of, and response to, information.

A project can be given a categorical exclusion at the federal level if a federal agency determines the project to have no significant environmental impact. Each agency has a list of regularly accepted categorical exclusions.

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New York’s Moynihan Station (top) and Boston’s Silver Line (bottom) are examples of NEPA categorical exclusions. 17

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Given that much of the proposed alignment is proximate to existing rail beds and highways, there may not be a significant environmental impact for many sections of the corridor. A project can also be granted a categorical exclusion if it was previously studied and approved. Thus many of the station upgrades and bridge replacements should also be considered in this category.

Some examples of the use of categorical exclusions on the Northeast Corridor include:

Moynihan Station in New York City, which went through an EIS in the late 1990’s, was delayed, and recently broke ground for phase one development. 18

•

Boston’s Silver Line, linking Logan Airport to South Station. 19

•

Metro-North’s New Haven line, which is a section of the Northeast Corridor from New York City to New Haven, is already going through an EIS for catenary upgrades and bridge repair. 20

•

For the components that cannot be dismissed, the lead agency completes a second level of analysis; 21 the environmental assessment (EA). At this stage, the agency considers the environmental impact and potential mitigation strategies. The EA typically includes a section explaining why the project is needed, what the alternatives are, potential environmental impacts, and the agencies and individuals consulted. If the project is granted a Finding of No Significant Impact (FONSI), it can progress.

Metro-North’s New Haven line is already going through an EIS for upgrades and bridge repair. 22

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Otherwise, the lead agency begins the third tier of assessment, the EIS. The full EIS is the most detailed assessment and can be the most challenging to study because many agencies are often involved, and multiple opportunities for public input are a mandated part of the process. This gives opponents opportunities to delay the project. The EIS includes an in-depth evaluative analysis of the project and the alternatives for its implementation. There is a discussion of whether the project is needed (the ‘no-build”), how the environment is affected, the environmental consequences of the project, and the listing of all individuals and agencies that contributed or were otherwise included in the EIS study.

SPANISH MODEL

In Spain, the government holds public meetings, but the information flow is predominately one-way and there is little public input to major infrastructure which have been designated as priorities by the European Union. While this helps ensure their projects move rapidly, American planning is based on public involvement. The Spanish example does show, however, that keeping all constituents informed throughout the entire process may increase public support of the project, decreasing potential litigation delays.

Zaragoza development official explains station area development and Spain’s public participation model. 23

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Hanford County citizens look at maps of the proposed California high-speed rail project as part of the civic participation component of the EIS. 24

The lead agency may choose to skip the EA and begin with an EIS, presuming significant environmental impact, for those sections that do not qualify for categorical exclusions.

In the EIS, there is also a public involvement component. Outside parties may add input throughout, but especially during the comment period of the draft EIS. Some individuals may not want to live near high-speed rail and might choose to voice dissent despite the technological advances designed to mitigate adverse externalities. The public can voice their opinions during the scoping process and public hearings. The lead agency must include the results of public outreach and alternatives analysis in public reports. Incorporating the suggestions adds an unknown amount of time, often significant, to every project cost projection. 25 As the lead Federal agency in the NEPA process, the FRA (or perhaps NECSA, if it becomes a designated federal authority) is responsible for scoping, inviting cooperating agencies, and developing consensus among a wide range of stakeholders with diverse interests, resolving conflict, and ensuring that quality transportation decisions are fully explained in the environmental document.

These responsibilities force the FRA to balance transportation needs, costs, environmental resources, safety, and public input in order to arrive at objective and responsible transportation decisions.

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NECSA can work closely with the FRA to start a dialogue among stakeholders involved in the process. This shifts the public input from reactive to proactive. By facilitating an interactive dialogue, NECSA can work to avoid conflict, mitigate conflict, or compensate affected parties before there is a problem. Litigation is costly financially and in time and should be avoided whenever possible.

Making Regulations Match: Crash Avoidance vs. Crash Worthiness The environmental impact statement will also address the safety of adding high-speed rail to the Northeast Corridor. A factor that significantly affects the cost of vehicles for the NEC is whether the trains are crashworthy (to the point of withstanding collision with a freight train). Given that the Acela already runs along the corridor, many of the external safety concerns have been mitigated with the elimination of at-grade crossings and the use of pedestrian bridges. 27 In fact, high-speed rail is one of the safest modes of travel available, with very few crashes worldwide in the nearly 50 years since the first high-speed rail system – the Shinkansen, in 1964 – began operations.

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SNCF TGV Alsace Gare de Richwiller signalling system. 26

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The FRA mandates that train cars be able to withstand crashes with other trains, highway vehicles, and shifting freight, to the level where passengers inside are safe. 28 To comply with this standard, passenger rolling stock is often made heavier than it would otherwise need to be. This weight difference also affects the ability of the rolling stock to travel at “true” high-speeds of greater than 150 miles per hour. The EIS should also consider the pollution differential and energy use of a heavy train trying to go 150 mph and a light one moving at the same speed.

The advocates for crashworthiness, including the National Transportation Safety Board, railroad employee organizations, and Congress members, advocate safety, not necessarily weight. The reason safety and weight are not synonymous is because many safety precautions can be taken with better signaling, dispatching, temporal separation, and system improvements towards crash avoidance. All of these factors are within the jurisdiction of FRA regulations and intervention.

One way to meet FRA standards is to use a closed system dedicated to high-speed rail. When the system is closed, such as the one that was proposed in Florida, passenger rail can run without meeting the crash-worthiness standard. But a dedicated high-speed right-of-way, as opposed to two dedicated high-speed tracks, would drive the costs of the NEC project too high, while also limiting the benefit of additional track capacity. Further, complying with the current crash-worthiness standard in this way would require additional bridges, tunnels, and other infrastructure, creating a burden on local governments and causing additional environmental disruption where none may be necessary.

NJ Transit’s RiverLine passenger rail from Trenton to Camden received an FRA waiver from the crashworthiness regulation. 30

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In Europe, high-speed trains share tracks with freight, but also use careful coordination to dispatch the trains. This is a model the US could, and in some ways already does, use. In New Jersey, the River Line passenger rail from Trenton to Camden runs on a freight line, and the two are temporally separated by their operating hours. As they never overlap, the FRA granted a waiver from the crashworthiness regulation. In California, rail lines include an electric track signal that provides any train that missed a switch or otherwise ended up on the wrong track. 29 The FRA granted the California High-Speed Rail Authority a waiver in which the passenger trains do not have to meet weight standards able to endure a crash with freight vehicles. The regulation is a tool the FRA uses to certify units safe to run. In California, the passenger trains will be separated temporally, through scheduling of operations, from freight trains. The waiver represents an agency turning regulation into possibility.

In fact, some argue that this sets the national precedent toward greener, faster, safe train operation.

There are also small design modifications that can increase crashworthiness without increasing weight, such as lengthening the nose of the lead vehicle. On the system level, temporal separation is a practical solution, given that high-speed rail would likely operate most trains during the daytime, and there are only a few small segments in the Northeast Corridor with any schedule overlap with freight. NEC high-speed rail should be granted a waiver from the FRA crashworthiness weight requirement with the understanding that additional signals and operator communication will be utilized.

Corridor Preservation The biggest benefit of the EIS to HSR is the opportunity to build the multi-agency coordination and broad consensus among public and private stakeholders. NECSA can work with local governments and adjoining property owners to facilitate the implementation of the project once environmental and other approvals and permits are obtained.

The Northeast Corridor includes 888 track miles from end to end but the right-of-way varies in width. The high-speed rail project will be large scale, and it will be challenging to acquire large connected parcels of land. Current land use policies are generally directed to individual parcels of land and not to linear corridors of great value to communities as locations of region-serving infrastructure.

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Transportation R.O.W. preparation in Missouri. 31

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As described earlier in this section of the report, NECSA must have the authority to work with local governments and land owners to accomplish changes to zoning to prevent inappropriate development in the planned right-of-way where acquisition of land and easements would be required.

The FRA, through the designation of the Northeast as a high-speed rail corridor, should be able to place an overlay where the new high-speed rail will go. NECSA will then work with states to come to agreement regarding the project and its alignment.

The states, with guidance from NECSA, will work with local governments to implement the overlay: zoning for high-speed rail and compatible uses. With the state level partnership, if there are other, smaller municipalities better prepared to be on the high-speed rail corridor, this is when involved parties can make those alignment decisions. The EIS is the medium to catalyze multi-agency coordination and local level partnerships.

This corridor must be designated a multi-use corridor to ensure the highest and best use of the land: primarily a high-speed rail corridor with compatible use optimization for utility, energy, and fiber optic lines. In the early 1990s, there was a corridor acquisition project for transportation that was not permitted to add utility lines because the government acquired the land as a public good. When taking the land, it is important to include a clause delineating the potential public sector benefit from including compatible uses. This also affects the size of the right of way, which must be adequate to serve as a multi-use corridor.

Agency Bureaucracy Within the FRA’s and NECSA’s authority, participating agencies should be held accountable for the time frame decided upon the regulations and in the memorandum of understanding between agencies. 32 The MOU should include the presumption that requests are approved unless otherwise stated. This reduces transaction and approval times, prioritizing the high-speed rail project. On top of that, using a fixed clock in which all agencies must respond to documents within a specific time period would ensure that the EIS does not collect dust between reads.

Additionally, there are some components of the EIS communication which are out of date and should be updated for technology. Thus while carrier mail was the delivery method of choice in the 1980s, today e-mail notification and electronic access to documents should be acceptable.

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Technological Improvements In the current days of internet, satellite imagery, and Google Street view, the mapping necessary for the EIS is easier to see, complete, and discuss. At this point, agencies can compile their mapping files together to better identify areas that will need mitigation. Federal agencies may have database files regarding how they, for example, previously rerouted the train around a wetland and thus they would be able to apply best management practices where needed. In addition to e-mail, file-sharing, videos, and digital imagery can elicit more informed decisions from all parties involved in a shorter time frame. Thus each agency site visit can help inform the others. Citizens who are unable to go to the site can also be better informed. This would enable clear information sharing rather than individuals besieged by technical jargon. Outreach programs can also reach a larger percentage of the public through social media platforms.

This enables a faster exchange of information that the FRA and NECSA can then include in the draft and final EIS. The potential of high-speed rail is too important to be lost by an unduly extended or inefficent EIS process. Responsible parties need to address the regulatory hurdles that can be updated to facilitate necessary approvals. The new public benefit corporation NECSA will be positioned to expedite the environmental review without losing the integrity of NEPA. The agency will find and apply for applicable categorical exclusions to reduce redundancy. NECSA will work proactively to obtain and include input from all project stakeholders, resolving future disputes before they happen. NECSA will also work with the FRA to ensure the system signals and train sets are the lightest and safest possible. The lead agency will also unify land use plans across levels of government to ensure the most compatible uses. Through communication technology upgrades, NECSA will be able to correspond with project stakeholders faster, clearer, and more in depth than ever before. NECSA will align the vision of high-speed rail on the Northeast Corridor with expedited action for a project without delay.

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Northeast Corridor Systems Authority proposed structure.

US Federal Government

Congress, USDOT, FRA

Long Term Investors

Private Operators

Amtrak

Commuter Rail Construction P3

Telecom P3

Utilities P3

Real-Estate P3

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New York Stock Exchange

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4. FINANCIAL VIABILITY

SECTION OVERVIEW What are the possible and optimal funding and financing packages that can pay for Northeast high-speed rail?

Historically, federal government grants and subsidies have paid for the lion’s share of the upfront construction costs, and to a lesser degree, ongoing operations and maintenance. In today’s economic climate, public resources available for investment in large urban, regional, and national systems of transportation are dwindling. The need for such resources is dramatically increasing, however, in the face of rising gas prices, greater awareness of environmental impacts of travel, and market demand for more walkable places to live and work. Public support for such investment remains divided; it is caught in the national debate over the size and role of government at all levels.

Unlike other transportation projects, high-speed rail in the Northeast Corridor is poised to generate an operating profit that can be used to pay back a significant portion of the upfront capital investment. The federal government can make this project a reality by combining grants, credit assistance, and tax code incentives to cover the project costs through construction and into initial service operations.

The private market, under terms that reduce risks and provide reasonable returns, can be a significant contributor to the implementation of highspeed rail in America. The federal government, with assistance from local governments, will need to take the lead in funding and in policy, to implement the vision and to make its potential for economic transformation a reality.

HSR projects around the world are being implemented through a variety of funding and financing sources, and many include some form of private investment in the form of equity and/or debt.

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The Penn studio team has investigated the structure of several of these infrastructure and rail projects—including specific projects in the UK, the Benelux countries, Germany, Spain and Portugal—to understand the sources of capital that moved the projects from planning to reality. An important focus of this investigation was the melding of public and private resources to attract the equity and debt required for implementation. The investigations included how these transactions are structured, who the typical private investors are, the public financing strategies and other assurances that are needed to make them work, and the ratios of public to private investments that are commonly achieved.

Private capital can enter at many stages of these projects, from project inception though project operation. The use of private funds can be more effective once project approvals are achieved and over shorter, rather than longer, payback periods. However, European high-speed rail projects have all included significant public funding support through a variety of national and European Union (EU) programs. In many cases, it was a strong showing of public support and careful risk management that enabled the private sector to participate in these projects, reducing the need for public monies in some cases (as, for example, with the Perpignon-Figueras HSR tunnel linking Spain and France) and paying back the government investment in others (as exemplified by the longterm lease on England’s HS1 project).

The equivalent forms of public monies in the US federal government have not, and do not, reach the scale of European public capital available for major infrastructure projects in this country. To move forward with high-speed rail in the US, new and larger forms of public investment are required and should be structured to attract and support additional private capital. At the same time, funds and tools for public investment are scarce compared to the many demands for them. Federal and state governments are shifting towards deficit reduction and away from stimulus spending and social benefit programs.

The institutional structure of the high-speed rail project, including the public and private roles in building and operating the system, is inseparable from the identification of sufficient, viable funding and financing strategies. The Financial Viability chapter of this report is best read alongside the Institutional Innovation chapter, which proposes that responsibility for track and station infrastructure be separated from train operations on the Northeast high-speed rail network.

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THE COST OF HIGH-SPEED RAIL C APITAL COST BREAKDOWN Existing Corridor Upgrades Track and Systems Stations Overhead* Environmental Mitigation* Rolling Stock Total Capital Expenses

14,000 48,900 21,400 12,600 2,100 4,100 103,100

* Costs are in $ millions. Overhead represents 18 percent of total constrction costs, which includes Track and Systems and Stations.

Environmental mitigation represents three percent of total constrction costs.

The May 2010 PennDesign studio report, Making High-speed Rail Work in the Northeast Megaregion, estimated the cost of implementing highspeed rail on two dedicated tracks between Washington, D.C. and Boston at approximately $98 billion. To investigate further into the sources of funding and financing, the 2011 studio began with the initial construction cost estimates from the 2010 HSR studio work, which were based on California high-speed rail project cost estimates. These were inflated by 20 percent to account for a higher CPI (three percent) on the Northeast Corridor compared to the State of California and included a 17 percent contingency. This year’s studio team improved the service plan, cutting down on some station and rolling stock costs, but also included concurrent upgrades on the existing corridor. This created a revised estimated project cost of $103 billion.

Infrastructure revenue will depend indirectly on ridership demand as core revenue streams will include access fees from passenger train operators based on train miles traveled.

PHASING The financial model prepared by the studio analyzes both the infrastructure and train operator’s revenues and costs for the entire NEC based on ridership projections and system capacity. Ridership projections were based on HSR’s travel-time and cost profile relative to existing modes.

Labor and non-labor (e.g., operating and maintenance) costs came from a 2010 Tier One EIS estimate on the planned Atlanta-Chattanooga highspeed rail line. Numbers were increased by 20 percent to reflect the higher CPI (16 percent) on the NEC compared to Atlanta as well as an additional four percent contingency. Operating and maintenance costs were allocated on a seat-mile basis and came out to about 12 cents per seat-mile, comparable to international examples.

The funding and financing recommendations are based on a projected timeline of events. This report proposes that the project be built in phases, with HSR service between New York and Philadelphia constituting the first phase.

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In 2012, environmental and early engineering planning for the first phase will begin. By 2015, the right-of-way for all phases will be acquired.

In 2018, HSR rolling stock will be purchased in preparation for the earliest stages of HSR operations to begin in 2020. Seven years after the start, in 2019, environmental review and planning for both phases will be completed. By 2022, all phase one tunnels will be completed and by 2024, all of phase one track, stations, and associated construction will be complete. By the beginning of 2025, the average speed between Washington, D.C. and Boston will reach 110 mph compared to the average 80 mph for today’s Acela service.

Construction for phase two, from Washington, D.C. to Philadelphia and from New York to Boston, will begin in 2025 and seamlessly pick up from phase one. As incremental improvements to the track occur, trip times will continue to shrink and ridership will increase accordingly based on the elasticity of ridership and trip time. Based on this aggressive timeline, the entire corridor will be built out by 2035, with trains averaging almost 150 mph and trip times between Washington, D.C. and Boston as fast as 3 hours and 28 minutes.

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Phasing Timeline (right).

Construction and rolling stock costs.

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FINANCIAL PERFORMANCE For nearly 50 years now, railroads around the world have found that highspeed services can operate at a profit—sometimes a considerable profit.

This is based on fare collection, when the operating entity is not required to also fund or finance the right-of-way and infrastructure, beyond the access fees which public infrastructure management companies typically charge. National governments may in some instances guarantee minimum ridership revenue, through availability payments or other agreements, and may even choose to subsidize fares for the purpose of pursuing the attainment of other national and regional objectives, such as promoting long-distance commuting on HSR. To examine the possible use of excess revenues as a means of financing investment in HSR infrastructure, the studio constructed a financial model to analyze ridership projections, as ticket fares generally constitute the primary revenue source for railroad operators. As discussed later in this section, the relationship between the fare box and infrastructure ownership revenue can be diluted through different access fee structures, thereby reducing demand risk for the infrastructure owner but also reducing the assets available to support project financing. This section describes the assumptions and methodology used to forecast ridership levels, revenues, and costs in 2020 and beyond. The main assumption is that access fees will be set at levels that allow the operator to recoup all of its costs and generate a small profit but that the majority of the profit from the system will flow to the infrastructure manager to pay for the upfront capital investment.

Ridership Model The ridership projection used in this report is based on a combination of three markets: The existing Northeast Corridor inter-city travel market projected out to 2035, long-distance commuters, and induced demand for new inter-city trips by employees of knowledge industries. The model projects total 2035 ridership to equal 37 million riders on the system; 31 million from the existing market, two million commuters, and four million induced trips by knowledge workers. Experience on several recently opened HSR routes in Europe, such as the Barcelona-Madrid route, suggests that induced demand can account for as much as 20-30 percent of ridership on successful HSR services.

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Amtrak Northeast Corridor Ridership: 2000-2010.

Ridership Projections: 2020-2065.

Within the Northeast Corridor, New York City is the largest generator of inter-city rail trips with more than 16 million trips either starting or ending in New York. Washington, D.C. is the second largest generator at 12 million trips. Boston and Philadelphia follow with over eight million trips each. Although the Megaregion’s four biggest cities account for the majority of trips on high-speed rail, other areas that generate a significant number of trips include Long Island (Nassau and Suffolk counties), Baltimore, Hartford, and New Haven.

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Methodology The ridership model uses separate methodologies for the three different markets. The existing travel market is projected out to 2035 based on the 1995 American Travel Survey. The 1995 survey was regressed based on the populations and distances between the Metropolitan Statistical Areas (MSAs) in the Northeast Megaregion. Next, the populations of the MSAs were projected out to 2035 based on estimated growth rates from 2010 to 2015 and new travel markets were subsequently created.

After estimating the total inter-city travel demand, the model assigns travelers to modes based on a nested logit model for each MSA pair based on travel time and cost profiles of the different modes. The model takes into account travel times on both the true high-speed line and upgraded coastal service on the Shore Line. Finally, the HSR mode share is multiplied by the total travel demand yielding HSR’s capture of the existing travel market.

The methodology for estimating the commuter and knowledge industry ridership was very similar. For the commuter market, employment by zip code was projected out to 2035 and the total employment within two miles of each HSR station was calculated using GIS. Next, onehour commuter-sheds were created with and without high-speed rail using network analyst. The employees from the station-area were then distributed evenly based on working age population of the census tracts in the two commuter sheds. HSR ridership was estimated as one quarter of one percent of those commuters who were assigned to census tracts within the expanded commuter zone but outside of the pre-HSR onehour zone. The one quarter of one percent of commuters were deemed those who had extremely strong job and housing location preferences and relatively little sensitivity to price. Those who were within a one-hour travel time before HSR were excluded because it is assumed that they will have little benefit from switching to HSR and will continue to drive or take commuter rail.

The induced demand from HSR is based on the interconnections that HSR offers on the megaregional scale. While the Northeast’s high-tech workers are already making frequent business trips for their jobs, they are mostly making those trips within MSAs rather than between MSAs. Highspeed rail opens possibilities for travel between MSAs by putting many more knowledge industry workers within a two-hour travel time for fullday meetings. The induced demand model creates similar two-hour travel coverage from each station with and without high-speed rail.

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Induced demand for inter-city travel is calculated as a gravity model between the projected 2035 knowledge industry workers around the station and those in other zip codes. HSR captures the knowledge industry employee trips from each station-area to zip codes falling within the expanded HSR two-hour travel zone but outside the existing autobased two-hour travel zone. The expanded two-hour travel zones allow one-day trips to and from New York from anywhere in the megaregion and open numerous meeting and collaboration possibilities for knowledge industry workers that are not currently possible. Based on the capture of those longer-distance business trips, it was estimated that an average knowledge industry worker would use HSR for one or two trips per year depending on how many of these workers fell in the expanded travelshed. This is a conservative estimate and the actual amount of induced demand could be significantly higher because of the agglomeration effects of HSR.

Revenue Streams: Core and Supplementary Core Revenue Fares

Operating Income: 2020-2065.

The train operators will collect fares from passengers to cover their operating costs and make access payments to the infrastructure owner.

From the ridership model, it was assumed that average fares on HSR would be roughly 90 percent of the current advanced-booking fares on Acela.

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This reduction will be made possible because of the large amount of new capacity that will be created by high-speed rail. The lower fares will make HSR very attractive to riders and allow rail to capture significant mode share across the corridor. On top of average fares being lower than they are today, the operators will likely employ yield management schemes to differentiate between different classes of passengers. In Europe, for example, yield management allows HSR operator Thalys to charge someone who booked a second-class ticket two weeks ahead of time â‚Ź25, but charge a person who booked a last-minute first-class ticket â‚Ź120 for the same trip. Similarly, HSR in the US will be able to offer fares significantly lower than the average to some passengers, while charging others much more for higher levels of service.

Access Charges A rationale for separating train systems into infrastructure and operations is the use of access charges to maintain the quality and integrity of the tracks and allow for competition among operators. There are many ways in which access charges can be implemented, but the principle behind them is simple: Train operators pay a fee to run their trains along a stretch of track. The track owner collects this fee and reinvests the money into the tracks to maintain a state of good repair or expand the network.

In Germany, for example, access charges provide for 100 percent of the costs of maintaining and operating the track system as well as 30 percent of new track construction. 1 Access charges can also provide a valuable revenue source for private investors. Because they provide a reliable source of revenue, access fees can essentially pay dividends to investors who purchase equity stakes or concessions from the infrastructure manager.

millions ($)

Operating revenue sources.

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In the UK, the British Government recently sold a 30-year concession of the High-Speed One rail line to two Canadian pension funds for more than £2.1 billion, or approximately one third of the system’s total construction costs. In Portugal, future stages of the high-speed rail system will be partially funded by upfront private capital, with access charges and publicly-guaranteed availability payments providing a regular revenue stream for private investors. In the first example, access charges encouraged private investment in the system once operations were stabilized, while in the second it encouraged limited upfront private investment. Both of these cases are closely linked to their specific national contexts, but they provide useful generalizations of how access fees can help to attract private investment.

In any arrangement, it is imperative that a strong regulatory agency ensures that an adequate portion of access fee revenues is reinvested in the track network to maintain a state of good repair. In a previous arrangement in the United Kingdom, infrastructure ownership was separated from maintenance and both were sold to private entities.

Insufficient access fees were allocated to track maintenance, leading to a deterioration of track quality that ultimately hampered operations. After several train wrecks and extensive service disruption, the UK government then re-nationalized this system. There is a lesson to be learned – parceling out too many pieces of track ownership sacrifices the quality of track maintenance.

The European Union has developed guidelines for access charge systems, which provide a model for a similar system in the United States. These guidelines require clear, non-discriminatory pricing formulas that allow multiple train operators to run on each country’s rail network. Many European rail networks have websites that allow passenger and freight railroads to determine the charges they would incur by running on the network, thus encouraging easy entry to the market. The pricing formulas are based on a variety of factors designed to measure the impact of each train on the overall system. These factors include the weight of the train, the time of operations, and the importance of the track segment to the overall rail system. This formula measures the marginal cost of each train on the network and may also include a nondiscriminatory mark-up. On a functional level, the operator generally includes this charge within its ticket price structure.

In sum, access fees provide a consistent, dedicated source of revenue that ensures high-quality operations while also encouraging private investment.

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Supplementary Revenues A key element of profitable operations is the creation of supplementary revenue streams. Many of these revenue sources will provide independent utility and profitability. The financial analysis explores the following options:

Passenger Facility Charges Following the example of airports, passenger facility charges at the stations owned by NECSA can go into dedicated revenue streams for station upkeep. Ticket surcharges of $2.50 per passenger are assessed at the originating train station. The station owners collect this revenue and use it for station maintenance and upkeep.

Amenities Amtrak’s food and beverage sales currently equal approximately six percent of ticket revenues. There is room for growth, and through happy hour specials, dedicated bar cars on peak trains, and seat-service, this revenue stream can increase to ten percent of ticket revenues.

Advertising The sale of advertising space on the train and in the stations has the potential to generate supplementary revenue. Advertisers have unrivaled access to riders as the riders are onboard the train for extended periods of time. If HSR employs airplane-style entertainment systems, riders typically will view sixty ads per hour, including both video and print media. With an average ride lasting 72 minutes, the train operator can make a net profit of $4.54 per rider from advertising. 2

Retail Rental and Parking Income If the infrastructure-owning entity is also a part-owner in the stations, there is the potential to invest some of the cash flow from retail rents and parking back into the infrastructure. In the case of HS1 in England, five percent of total revenues came from station retail. The financial model assumes that the infrastructure owner will generate five percent of annual ticket revenues from all stations on the line.

Energy Resale through Braking High-speed trains have the unique ability to recapture a portion of their operational energy through braking. This feature can significantly reduce the amount of conventionally-generated energy required for operations and can also provide an additional source of revenue for the operator.

When trains apply their brakes, they can capture the energy lost and return it to the energy grid for use by the general system.

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In Germany, infrastructure owner DB Netz currently pays operators 40 percent of the market price for this energy, an amount that some experts believe could be significantly higher.

The German advocacy group Mofair has proposed that 25 percent of total rail energy needs can be met through energy resale, thus reducing the need for generated power to 75 percent of operational demand. This has clear environmental benefits and also improves the financial viability of high-speed train operations. 3

Rolling Stock Leaseback When a public entity operates the trains, it often leases its rolling stock from a private entity. The tax benefits of rolling stock cannot be realized from public entities since they are tax-exempt. A private company, therefore, will purchase the rolling stock and lease it back to public train operators. The private company can take the depreciation benefits of rolling stock ownership and decrease its taxes owed to the government.

Through industry research, the studio team found that a typical annual lease rate was twelve percent of the original cost. The depreciation schedule used was a seven-year MACRS 200 percent declining balance method. 4 Greater detail on depreciation can be found later in this section.

Supplementary Revenue Sources.

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Beneficial Use along Railroad Right-of-Way HSR operations can capitalize on beneficial uses of the right-of-way, such as leasing easements to utilities that also require a continuous corridor.

Traditional partners include electricity transmission infrastructure, natural gas and oil pipelines, fiber optic cables, and cell phone towers. Along with these entities, railroads share the need to run through population centers to reach end-users.

As density along the Northeast Corridor increases, the opportunities to acquire additional right-of-way will shrink. There is no need for each utility to separately acquire the right-of-way. Instead, the utilities can take advantage of the railroad pursuing a new rail line and offer up-front payments for a long-term, use of the railroad right-of-way, both above and below ground. In exchange, high-speed rail can raise money to fund its capital expansion.

The most important consideration for the railroad is to include utilities within its right-of-way engineering and legal planning from the beginning.

There is a one-time opportunity to build the required fiber optic cables or pipelines, for example, because they cannot be added after high-speed rail is constructed. 5

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The railroad must also state upfront what rights it wishes to acquire such as a transportation-only corridor or a shared corridor with third-party facilities. 6 The railroad infrastructure owner must include a warranty clause to limit its liability within the corridor.

While the utilities benefit from avoiding the complex process of acquiring a new right-of-way, there are several issues that create tensions in a shared corridor. As an employee of a pipeline company summarized: “Maintenance is more costly, but if constructing a new line, the railroad right-of-way is an open, clear corridor and very attractive but very high costs.” 7 Utility construction can be subject to railroad specifications and has additional fees such as a “railroad inspector during construction (daily charge), an application fee (one-time fee), an engineering review cost (one-time fee) and railroad protective liability insurance”. 8 On-going maintenance is costly as coordination with the railroad is required.

Electricity Transmission New electricity transmission infrastructure is in demand along the southern alignment of the northeast corridor. The railroad right-of-way offers regional transmission operators a relatively cheap and easy route on which to build additional transmission. They do not have to worry about land acquisition and instead can pay upfront lease payments to site the necessary infrastructure. A more detailed summary of these issues can be found at the end of this discussion.

The financial model assumes that electricity transmission operators will pay $25,000 per mile per year and transmission lines will run for 270 miles from Washington, D.C. to the eastern shore of Long Island. 9

Fiber Optic Cable As the telecommunications industry continues to expand, it continues to depend on fiber optic cable for high-speed telecommunication service between population centers. The railroads have a history of partnering with fiber optic cable companies to both lease the right-of-way and use the capacity for railroad operations. Union Pacific has its own fiber optics department to both lease its right-of-way and use the cables for its own communication purposes. The Spanish national rail infrastructure owner, ADIF, sells the excess capacity of its fiber optic cables to telecommunication companies to generate supplementary revenue.

On the Northeast Corridor, Amtrak signed a right-of-way lease in 2001 with a fiber optic cable company for 375 miles between Washington, D.C. and New York along its Northeast Corridor Line and between Philadelphia and Harrisburg on the Keystone Corridor. 11 The 15-year lease was the first aerial construction permitted by Amtrak and was strung using existing Amtrak poles and standards.

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High-speed rail has the opportunity to market its alignment to interested fiber optic cable companies. Opportunities to capitalize with fiber optic companies will depend on market demand to connect cities in the corridor with high-speed telecommunications service.

The financial model assumes that Amtrak’s existing fifteen-year lease with a fiber optic cable company will expire in 2016 and be renewed in 2017.

The renewed 15-year lease will lease 270 miles at $25,000 per mile to generate $7 million pear year. 12

Pipelines Many pipelines parallel railroads, though very few of them have been constructed in the past twenty years. In the Northeast Corridor, the mining of natural gas in the Marcellus Shale region of Pennsylvania promises a supply of natural gas as a source of energy for the foreseeable future. This gas is best transported by pipeline, and the opportunity to use segments of railroad right-of-way to run pipeline could attract upfront investment.

HSR may be concerned with the transport of hazardous materials through pipes and the railroad infrastructure owner must have sufficient liability insurance to protect itself from any accidents.

Pipelines typically require a 25-foot pressure sphere from passenger rail.

If there are two or three trains in a row, it will require a greater buffer.

When pipeline is located within that sphere, it requires sheathing, which increases construction costs. Pipeline can be built in tunnels beneath the rail line. The largest challenge for pipelines alongside high-speed rail is the electricity of rail cars disrupting pipeline cathodic protection (cathodic protection is the method to prevent rusting of steel pipelines, which leads to corrosion and subsequent leaks. Electricity leads to pipe corrosion and engineers counter stray electricity of nearby electricity lines (or electric rail cars) by placing more “sacrificial anodes” alongside the pipe).

The financial model assumes that pipeline will be run 270 miles from Washington, D.C. to the eastern coast of Long Island. This is based on the expected demand for natural gas as an electricity source and this track runs closest to the natural gas drilling locations in northeastern Pennsylvania. Each twenty-year lease is based on a lump-sum payment of $1 million per mile every twenty-years. The first lease begins in 2016 after the right-of-way is acquired and goes through the end of the model in 2065.

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Cell Phone Towers As the number of wireless devices increases with technological advances, the demand on wireless transmission will increase. Cell phone tower siting often generates a NIMBY backlash despite the great demand population centers have for increased wireless coverage. A tower located on a rail corridor can provide communities with the coverage they desire while at the same time locating the tower somewhere already reserved for large utility infrastructure.

The rail infrastructure owner may think about either leasing space to a wireless carrier to build a cell phone tower or constructing the tower itself and selling the capacity. The cost to build a tower is $150,000 and a fully loaded tower can generate approximately $100,000 per year and boost revenue. 13 The disadvantage is the ongoing maintenance requirements of the tower and any interference such maintenance presents to rail operations.

For 100 towers built along the right-of-way and generating $100,000 per tower with an initial outlay of $150,000 per tower, the railroad could generate close to $84 million at a 10 percent discount rate from 2016 to 2065.

Sensitivity testing: growth projections and highway congestion. The dip in 2048 and 2049 is caused by the purchase of replacement rolling stock from the start of operations.

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Sensitivity Testing Several scenarios were prepared to test the model’s reaction to different ranges of input variables. Using the initial projected ridership levels as a base case, the other scenarios changed different sets of assumptions to create high and low scenarios for ridership, revenue, and costs. For 2035, the annual range for ridership was from 31 million to 44 million trips depending on the assumptions used. However, even under the low scenario, the system still has enough riders to cover its costs and make a healthy profit. This suggests that operating revenues will be able to cover the operator’s expenses, generate a profit for the operator, and pay access fees that will go toward infrastructure maintenance and capital construction costs.

Summary In 2035, the system will generate $6.3 billion (nominal dollars) in revenue, compared to $3.9 billion in operating and maintenance costs.

Out of the $6.3 billion, $1.5 billion, or roughly 23 percent, comes from supplementary revenues, while $4.7 billion comes from ticket sales. New York to Philadelphia is the most profitable segment of track, followed

by Philadelphia to Washington, and New York to Boston. Rolling stock leaseback accounted for one third of the supplementary revenues with on-board food and beverage sales, station retail, and advertising also making significant contributions.

EUROPEAN EXAMPLES: INFRASTRUCTURE BANK Background Over the last few decades, American policy makers have proposed several variations on a national infrastructure bank but until recently, the proposal lacked Congressional initiative to proceed. 14 The proposals emerge in the absence of funding resources to construct energy, transportation, and other infrastructure investments crucial to national economic sustainability. The basic premise is that leveraging starter funds backed by the “full faith and credit of the United States Government” will attract commercial bank investment.

The concept of an autonomous financing entity for large infrastructure projects originated in Europe in 1958 as part of the Treaty of Rome.

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Role of European Investment Bank in Portuguese HSR Project: Poceirão to Caia (top), European Investment Bank as percentage of total HSR project cost (bottom).

Known as the European Investment Bank (EIB), it set Europe on the path towards economic integration by offering loans, technical assistance, and venture capital to projects that “provide long-term finance in support of investment projects” 15 aimed at advancing Europe as a whole rather than the interests of any one member state. 16 Since its inception, the EIB has expanded to include program funding that comprises five priority objectives: supporting small and medium-sized enterprises; protecting the environment; creating an innovative and knowledge-based European economy; building efficient trans-European transport networks; and ensuring sustainable, competitive and secure sources of energy. 17 The EIB finances projects at substantially lower interest rates and over longer periods of time than European commercial banks. Average loan terms with low interest rates over 20-35 years are possible thanks to an “implicit backing from the European Systems.”

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However, the autonomous bank practices commercial disciplines and strives for a-political status. 18 Over the last 53 years, the EIB has earned a AAA credit rating and grown from one billion “units of account” in 1958 to about €163.6 billion ($237 billion USD). 19 EIB loans have enabled continuation of projects amid the tough economic times of the global financial crisis. In keeping with its five priority objectives the EIB raised €80 billion for solar, wind, and high-speed rail in 2009 alone. 20 In a review of European high-speed rail projects, a clear trend of EIB participation emerges. Much like a Hollywood producer attracts more talent to a film by hinting at the actors that have already signed-on, highspeed rail projects in Europe rely on EIB participation as a means of attracting other financing. EIB participation, for example, has played a crucial role in financing HSR in Spain including the most recent loan of €2.5 billion euros ($3.6 billion USD) – a quarter of the project cost, for the rail link between the French and Spanish borders. Other EIB highspeed rail investments include projects in Turkey, Italy, Portugal, France, and Germany.

To understand the relationship between public loan programs and highspeed rail projects, we looked at several European high-speed rail systems.

In Portugal, the national government recently closed a contract to build a line from Poceirão to Caia. Half of the capital costs will be covered through grants from the Portuguese government and the European Union while the other half is covered through long-term financing mechanisms.

Breaking it down further, most of the loans came from the European Investment Bank, which provides patient capital through below-market, subordinated loans. The EIB is a catalyst for private investment to enter as it gives private lenders the security they need to invest in complex high-speed rail projects.

An Infrastructure Bank in the US? In his February, 2011 budget proposal for FY 2012, the President proposed establishing a National Infrastructure Bank that would lend upwards of $60 billion over the next ten years that would leverage several hundred billion in total investment and “jump-start additional job creation while also laying the foundation for future growth.” 21 A primary goal of the proposal was that projects be chosen not by politics but how they foster broader economic goals. However, the administration has not yet unveiled any enabling legislation.

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In 2010, the Administration announced its support for a six-year $556 billion surface transportation reauthorization that allocates $53 billion for high-speed rail and $30 billion in starter funds for the proposed national infrastructure bank. Federal transportation grants would come from the Transportation Trust Fund with a separate, yet to be determined funding source, separate from the Highway Trust fund supported by the Federal gas tax.

In March 2011, US Senators Kerry, Hutchinson, and Warner introduced the Building and Upgrading Infrastructure for Long-Term Development (BUILD) Act (S.652). This bill would establish the American Infrastructure Financing Authority, to serve as, “a type of infrastructure bank to complement our existing infrastructure funding.” 22 According to Senator Kerry, “this is a bi-partisan moment to make a once bi-partisan issue bi-partisan once again. Democrats and Republicans, business and labor, are now united to create an American infrastructure bank to leverage private investment, make America the world’s builders once again, and close the deficit in our infrastructure investments.” The plan begins with an initial investment of $10 billion with intent to leverage $600 billion in private investment.

Michael Likosky, author of Obama’s Bank: Financing a Durable New Deal, notes that the BUILD Act differs from the original Obama administration proposal in that it goes beyond funding just transportation and “would be able to spur investment from more types of private funds, and back projects in a wider swath of the nation.” 23 The Kerry-Hutchinson-Warner bill would fund revenue-generating projects that demonstrate the ability to repay the loan. The Obama Administration infrastructure proposal included a provision for half of the bank funding to be used for grants, but the Senators sponsoring the BUILD Act limited the bank to providing loans or loan guarantees to projects with identified revenue streams, but excluded grants, in an effort to gain bipartisan support for the program.

U.S. public financing mechanisms.

QUALIFIED TAX CREDIT BONDS

E

D N A XP

RAILROAD REHABILITATION and IMPROVEMENT FINANCING

TRANSPORTATION INFRASTRUCTURE FINANCE and INNOVATION ACT

D

E

AN P X

D

E

AN P X

UNITED STATES INFRASTRUCTURE BANK

TE A E

CR

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Northeast HSR and the Infrastructure Bank Current proposals for a national infrastructure bank do not specifically direct funds to HSR projects. However, given the potential ability of HSR in the NEC to generate revenue required under the proposed BUILD Act, Northeast HSR would be a prime candidate for funding under the infrastructure bank and could act as a flagship project for commencement of the bank’s operations.

PUBLIC FINANCING SOURCES Financing for Northeast HSR could include sourcing loans from both public and private sector lenders. The federal government currently has two loan programs, the RRIF and TIFIA programs, which could be expanded to help promote private investment in Northeast HSR. In addition, this report proposes the utilization of tax code incentives, such as a tax credit program based on the New Markets Tax Credit Program or Qualified Tax Credit Bonds.

Aerial photo of the Central Texas Turnpike System, SH45 North. 26

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ALLOC ATION DETAIL OF FEDER AL SOURCES Sources

Required Return (%)

Total Cummulative Allocation (approximate)

Allocation Detail

Largest Project ($ billion)

Federal Grants

n/a

$10.1 billion

$8B ARRA, $2.5B FY10 Budget, $0.4B Rescinded

$3.9, California

Tax Credits

n/a

$50 billion

Low Income Housing Tax Credits: $1.90 per resident per state in Low Income Housing Credits over 25 years. New Market Tax Credits: $29.5 billion over 10 years. Historic Preservation: $10 billion over 35 years.

$0.69, LISC

Qualified Tax Credit Bonds

n/a

$35 billion

$0.66, New York City

Build America Tax Credit Bonds

4 or less

over $180 billion

$1.3, Bay Area Bridge Authority

TIFIA

4.6

$7.9 billion

$0.9, Central Texas Turnpike

RRIF

4.6

$35 billion

Commercial Bank Loans 7 - 10

Only $1 billion spent to date.

$0.23, Daokota, Minnesota and Eastern Railroad $3.8, Indiana Toll Road

Expansion of TIFIA The Transportation Infrastructure Finance and Innovation Act of 1998 (TIFIA) created a federal credit program for transportation projects of national or regional significance. TIFIA can provide three types of assistance: direct loans, loan guarantees, or standby lines of credit. The program is designed to leverage federal funds by attracting private and other non-Federal co-investment to critical infrastructure projects. The favorable terms of TIFIA loans (currently 4.65 percent interest for up to 35 years) make it an inexpensive and patient source of capital that attracts other investors to the project. TIFIA loans can be junior to other debt except in the case of bankruptcy, insolvency, or liquidation, when they would rise to the level of the other debt. 24 In many ways, the TIFIA program is similar to the European Investment Bank or the proposed National Infrastructure Bank because of its ability to close funding gaps and encourage outside investment.

As of 2011, the program has provided a total of $7.9 billion of assistance to projects with a total investment of $29.4 billion. The two largest projects that used TIFIA funds were two sets of toll lanes in Texas, which received $850 million and $900 million loans. The total cost of the projects was close to $3 billion in both cases. On an annual basis, TIFIA provides about $1 billion in assistance but demand for that money continues to grow every year as other funding sources dry up. Requests for funds from FY 2009 were between $13 million and $1.1 billion with most in the $100-$300 million range. 25 141

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High-speed rail is in prime position to use TIFIA loans to finance part of its large capital cost. However, even if the loans are spread out by phase, there is not enough money in the TIFIA pot to support Northeast highspeed rail by itself, let alone in conjunction with the competition from other HSR projects. Thus, the funds allocated to TIFIA would need to be increased to encompass Northeast HSR and other HSR projects around the country. It would likely take a program capable of providing closer to $3 billion per year for TIFIA to provide the needed long-term financing for Northeast high-speed rail alone.

Railroad Rehabilitation and Improvement Financing Similar to TIFIA, RRIF loans can also be explored as options for financing high-speed rail investment. Since 1998, the Federal Railroad Administration is authorized to provide loans and loan guarantees up to $35 billion, of which $7 billion is reserved for Class II and III freight railroad. RRIF loans can be used to establish new intermodal or railroad facilities, with the ability to fund up to 100 percent of a railroad project with up to a 35-year repayment period with cost of capital equal to that of government borrowing. Eligible borrowers of RRIF include government sponsored authorities and corporations and joint ventures that include at least one railroad.

Using RRIF to fund high-speed rail in the Northeast Corridor would require high-speed rail to be considered eligible to receive direct RRIF loans and/or loan guarantees. Current constraints to use of RRIF loans include turnaround time on applications for funds, the need for a complete environmental assessment and other project specifications.

Since 2007, the FRA has made loan agreements adding up to just a little over $1 billion, and an average of three projects are approved to receive RRIF loans each year. Barriers to faster and more frequent approval include the NEPA process and changes in project scope. Legislation introduced in 2010 also requires projects going through the RRIF application process to go through a cost-benefit analysis completed by the FRA to determine public benefit of the loan relative to the amount of financial assistance requested.

RRIF loans are low-interest, therefore providing an attractive financing mechanism for investment. However, the administrative costs and requirements associated with RRIF could pose some challenges for Northeast Corridor high-speed rail.

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Tax-exempt and tax-credit financing tools are emerging as key capital sources for building crucial new generation and transmission assets — and the public sector is also becoming recognized as a demand driver, as regional and local efforts to promote cleaner forms of energy proliferate. 28

Tax Credits The federal tax code uses exemptions, deductions and credits to encourage private investment for socially-desirable purposes. Tax credits may be used in connection with both debt and equity capital investment, as described below. Because of the magnitude of the Northeast Corridor project and limitations on programmatic capacity and market absorption capacity, it likely will be necessary to utilize several different tools.

Qualified Tax Credit Bonds Qualified tax credit bonds (QTCBs) are an innovative debt financing mechanism that is currently used to fund projects in areas such as renewable energy, forestry conservation, and new school construction.

Legislation to expand QTCBs to infrastructure investments has been proposed several times in Congress, and a new bill is currently under consideration. These bonds utilize several unique mechanisms that can attract private investment in high-speed rail.

Governments and other public entities regularly issue bonds to attract private investment in large projects. These public entities can be the federal government, states and municipalities, or even a public benefit corporation. When these entities issue bonds, they are essentially borrowing money from investors and agreeing to repay that money, with interest, over a specified period. Qualified tax credit bonds are unique in that they allow public entities to borrow money without a direct interest obligation.

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Instead of accruing interest, holders of QTCBs receive annual tax credits from the federal government designed to equal the rate of the bond.

This allows the public entity to borrow with little or no interest expense; its only obligation is to repay the bond principal at the end of the term.

Because interest costs can represent between 50 percent and 80 percent of the financial cost of long-term borrowing, this arrangement allows public entities to more than double the investment level financeable within a given revenue stream. 27 From the federal government’s perspective, this arrangement is much less costly than grants because of the budgetary treatment: While every dollar of direct grants has a $1 cost to the government, the government’s “scored” (budgetary accounting) cost of $1 in tax credit bonds can be $0.25 or less.

Tax credits have been widely successful in attracting private investment to a variety of worthwhile causes, from affordable housing to historic preservation and economic development, and they have traditionally enjoyed broad bipartisan support. Investors in tax credits are often corporations and other investors with high tax liabilities, but added incentives such as tax credit refundability can also attract institutional investors such as pension and sovereign wealth funds. The current QTCB bill being considered in Congress, authored by Senator Ron Wyden, envisions a $50 billion tax credit bond program.

Expansion of the New Markets Tax Credit Program In addition to subsidizing borrowing, tax credits could be used to attract private equity investment specifically for infrastructure purposes.

This program could be based on the New Markets Tax Credit (NMTC) Program, which has facilitated more than $33 billion of private investment in low-income areas throughout the United States. The NMTC Program is notable in that it allows for many variations of investment structures that can be adapted to different projects and appeal to different types of investors. Under NMTC, private investors make equity contributions to an intermediary know as a Community Development Entity (CDE), which invests this equity in low-income communities and provides the investors with tax credits over several years. Under a “Transportation Markets Tax Credit” Program, public benefit infrastructure corporations, such as the one proposed in this report for Northeast HSR, could fulfill the role of the CDE. As compared to tax credit bonds, the NMTC program is designed to build equity in a project that does not need to be repaid. After a set period of time, the private investor’s equity stake can usually be purchased by the project sponsor for a nominal fee. This investment structure could thus serve as a means to attract private capital to high-speed rail and build long-term asset value.

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Scenario 1: Project sources and payback

The New Markets Tax Credit Program has been criticized as unnecessarily complex. As such, any program following this model may need to be streamlined. Additionally, the success of tax credit investment programs is tied to the strength of the overall economy, as investors are more willing to purchase tax credits when they have higher tax obligations. This risk could be mitigated by provisions that allow tax credits to be exchanged for a reduced cash payment by the Treasury in times of economic instability. Ultimately, a wide range of co-investment strategies that rely on both government and private sources will be required to finance this project through its different stages and changing investment cycles.

Depreciation Benefits The equipment used by a high-speed rail system, most notably the rolling stock, can be depreciated on an accelerated basis. This provides significant tax benefits that can help attract private investment. Taxoriented equity investors, for example, invest in depreciable assets to count these benefits against their other income streams. These investors are willing to accept a lower rate of return than traditional equity investors in exchange for these benefits. Where a public benefit corporation or other similar entity is the owner of the rolling stock, taxoriented equity investors might invest directly in the PBC or gain these benefits through a leaseback arrangement.

The financial analysis performed for this project looked at costs from 2012 to 2065. Over this time horizon, the depreciation benefits for both the rolling stock and track infrastructure were calculated using a sevenyear MACRS 200 percent declining balance method. 29 The rolling stock needs were based on projected ridership levels. By 2065, the cumulative depreciation benefit for rolling stock reached $6.3 billion and for track reached $89 billion. The tax shields created will vary based on the tax rates for the private entity.

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SCENARIO ONE : PUBLIC OWNERSHIP While current plans for HSR across the country depend almost entirely on federal grants, the NEC’s high ridership and profit potential allows the corridor to examine other funding and financing mechanisms. Although the corridor will still require some grants, especially for upgrades of the existing corridor and during the first few years of construction, using public financing instead of funding can greatly reduce the public funds that will not be paid back. In the current climate of fiscal constraint, it is crucial that federal spending is leveraged through other mechanisms that will allow the federal government to get a return on its money through user fees.

Scenario 1: Project Sources (right) Grants Qualified Tax Credit Bonds (100 pct) Qualified Tax Credit Bonds (35 pct) RRIF Loan Infrastructure Bank TIFIA Loan Commercial Bank Loans Private/Local/State Contribution for Stations

Qualified Tax Credit Bonds Two sets of new tax credit bonds could become major components of funding HSR in the Northeast. In the beginning of the project, before any new services are initiated, the project will require fully-subsidized bonds where the federal government offers tax credits in place of interest payments. However, HSR will still be required to repay the entire principal at the end of the bond’s term. While the interest payments represent lost revenue for the federal government, they make a smaller impact on the national deficit than grants would. Over the span of the first 18 years, the project would need a total of $15.7 billion (in 2012 dollars) in 100 percent qualified tax credit bonds.

The second set of tax credit bonds that the project could utilize are Build America Bond (BAB)-style bonds where the federal government will take on 35 percent of the interest payment through tax credits while user fees will cover 65 percent of the interest and the entire principal. However, unlike BAB, these bonds would not bar other private capital from paying for parts of the project. These bonds will leverage each dollar of lost tax revenue with $2 of project financing, making them one of the most effective financing tools for the system. In total, 35 percent qualified tax credit bonds will constitute the majority of the financing in years 20202034, amounting to $17.3 billion.

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Scenario 1: Project sources and uses over time (right).

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RRIF The 2011 Penn studio team proposes to use RRIF funds to revitalize pieces of existing track and to start construction of HSR. Under this scenario, starting in 2014, RRIF loans will play a major role in the project financing through 2028. Since few large projects have included RRIF funding in the past, there is almost $34 billion left in RRIF’s funding. The team proposes to use $10.6 billion for the Northeast Corridor. Although this is a sizable percentage of RRIF’s total funding, it could be justified on the basis of the importance of high-speed rail in the Northeast to the country as a whole. All of the funds will be repaid through the access charges collected from operators.

TIFIA and Private Loans Once pieces of the high-speed rail system are operational and revenue is demonstrated, there will be opportunities to seek funds from commercial lenders. By leveraging these funds with TIFIA loans or loan guarantees, HSR can receive an additional $13.4 billion ($4.8 billion from commercial loans and $8.6 billion from TIFIA). These funds will be most important during the peak of construction in years 2020 to 2032.

Infrastructure Bank As many European examples have shown, financing from a central infrastructure bank is often the missing piece that will make large projects succeed. Based on international precedents and the current proposals for U.S. infrastructure banks, high-speed rail will need $11.4 billion from an infrastructure bank. Like the other financing mechanisms, this money will be fully repaid from user fees.

Other Non-Federal Sources of Capital There are two main non-federal sources of capital that will be invested in the project. As discussed above, right of way leases are a way to bring in revenue from other beneficial uses of the corridor. Total proceeds from ROW leases used to pay for up-front capital costs will be $389 million.

Additionally, cities and states will be asked to contribute to the costs of building the HSR stations for a total of $6 billion. These local contributions can come directly from the cities, through joint ventures with private developers, or through other means such as tax-increment financing and value capture. Since the cities stand to gain tremendously from high-speed rail, they are likely to recoup their expenses relatively quickly through higher economic productivity, property and sales tax increases, and where applicable wage tax increases.

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PUBLIC PRIVATE PARTNERSHIPS

Federal Grants

Definitions

Even with the maximum amount of public financing, this project will still require some federal grants for upfront capital expenses. In particular, the grants will mostly go toward paying to maintain and upgrade the existing corridor and for some of the earliest construction costs of the HSR system. After all of the other financing tools are exhausted, federal grants will amount for $26.5 billion in years 2012 to 2020. However, no extra grants will be needed just after the project opens and starts to generate profits from user fees. In fact, federal grants will be leveraged 3.8 to 1 for the construction of the new HSR line. Even though this scenario requires the government to pay for almost the entire cost of the project, innovative financing mechanisms will minimize government outlays through grants. Additionally, concentrating federal grants on bringing the existing corridor to a state of good repair will minimize the risk that federal funds will be used inappropriately.

33

Build-Own-Operate: a private contractor constructs and operates a facility while retaining ownership.

The private sector is under no obligation to the government to purchase the facility or take title.34 Concession Benefits: rights to receive revenues and other benefits (often from tolling) for a fixed period of time.

Design-Bid-Build: the traditional project delivery method where design and construction are sequential steps in the project development process.35 Design-Build Contract: an agreement that provides for design and construction of improvements by a contractor or private developer. The term encompasses design-build maintain, designbuild-operate, design-build-finance and other contracts that include services in addition to design and construction. Franchise and concession agreements are included in the term if they provide for the franchisee or concessionaire to develop the project, which is the subject of the agreement.36 Public-Private Partnership: a contractual agreement formed between public and private sector partners, which allows more private sector participation than is traditional. The agreements usually involve a government agency contracting with a private company to renovate, construct, operate, maintain, and/or manage a facility or system. While the public sector usually retains ownership in the facility or system, the private party will be given additional decision rights in determining how the project or task will be completed.

Role of the Private Sector Although most of the financing will come from the public sector, the private sector will be an integral part of this project’s success. Private planning, engineering, and construction firms will all play major roles in the project. Additionally, through neutral access on the tracks, private train operators will have the opportunity to compete to provide the train service. Finally, the loans from private sector banks will help finance the project and confirm the project’s revenue and profit forecasts, making public funds more secure.

Project Delivery Public Private Partnerships (P3s) As described in the Institutional Innovation section of this report, the track and station infrastructure ownership are separated from train operations. Under this arrangement, a single entity would be responsible for constructing and maintaining the tracks, catenaries, and signaling and other systems along the corridor. This entity would charge access fees to passenger train operators running trains along the corridor. Train operations would be handled by multiple operators who would collect revenue from ticket sales, food service, and advertising. Through a variety of funding and finance arrangements, these revenue streams can be leveraged with public support to attract private capital to construct the line, provide ongoing maintenance, or both.

Public private partnerships are a way for the government to save time and money on projects and transfer risk, by harnessing private sector expertise in construction, management and operation.

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P3s can save from six to 40 percent of the cost of construction and significantly limit the potential for cost overruns. 30 The reason for these savings is that the private sector has more appropriate incentives to limit costs than the public sector. 31 Efficiencies are realized through the bundling of different operational tasks within a partnership rather than separately outsourcing each activity. P3s combine several or more operations that together constitute a package of services within one longterm contract, enabling contractors to seek innovative solutions for cost reductions with a longer planning horizon.

P3s are becoming an increasingly common model for providing surface transportation infrastructure in the United States. Both the Federal Highway Administration and Department of Transportation have experience with private sector involvement in surface transportation facility operations. 32 The underlying rationale for P3s is that the transportation project will pay back the initial capital investment and generate a profit once operations reach stabilization. The potential to earn a return attracts the private partner. The public partner can leverage its initial investment with private sector expertise and capital to provide services to the general public that enhance the quality of life and promote economic development across our regions.

The term public private partnership defines an expansive set of relationships from relatively simple contracts (e.g., A+B contracting), to development agreements that can be very complicated and technical (e.g., design-build-finance-operate-maintain). In the context of this report, the term public-private-partnership is used for any scenario under which the private sector would be more of a partner than they are under the traditional method of procurement. Further, the broad definition used for public-private partnerships includes many elements that are applied fairly regularly on appropriate projects. 37

Argument for Private Capital The government’s ability to borrow cheaply is a function of its capacity to levy taxes. A project’s risks determine the real cost of financing it. The private sector explicitly prices these risks into the cost of finance. When the public sector finances a project, taxpayers bear the risks and implicitly subsidize the cost of the project because the risks are not factored into the government-borrowing rate.

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Scenario 1: Risks spread between public and private sectors.

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Scenario 2: Project sources and payback.

As states and localities face increasing budget shortages, P3s represent a model for new infrastructure projects that allow government to complete important public works despite limited public dollars. A 2008 GAO report recommended that P3 contracts share revenue between the private owner and government allowing taxpayers to benefit from any upside and allow for a deliberative decision-making process. 38 Despite the benefits of P3s, obstacles to the formation of partnerships include legal, financial, political, and cultural hurdles. In the United States, the public has resisted the “privatization of assets� that most people consider being public goods. For example, in 2008, Pennsylvania Governor Ed Rendell struck a deal to sell the state’s turnpike, but the lack of political support in the state legislature, which had to approve the transaction, ultimately kept the turnpike in public hands. 39

Risk Management The rationale for upfront private investment in high-speed rail is the future income stream that is anticipated over the life of the publicprivate partnership. While both the public and private parties share in the risks and rewards potential, the public-private partnership structure must balance the strengths of each sector. The public sector must assume responsibility for and cover the costs of all planning and environmental activities.

The most difficult risk to mitigate is demand risk or the risk that fewer people will ride the train than predicted. resulting in lower ticket revenues and lower income. Strategies for demand risk management include an access fee structure that is based on train miles rather than passenger miles.

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SCENARIO TWO : PRIVATE CONCESSION TO OPERATE AND MAINTAIN While public investment will be a large piece of the upfront capital investment, there is room for private sector involvement and expertise in the funding and financing of HSR in the northeast. In the second scenario for project implementation, NECSA, the public benefit corporation in charge of infrastructure management, builds the rail and leases long-term contracts to operate and maintain (O&M) the track and stations. HSR operations begin in 2020 as different pieces of the track come online. Under this scenario, NECSA operates the track until 2025 when the Philadelphia-New York City leg is completed. At this point, it leases a ten-year O&M concession to a private entity. The government uses its mix of various funding and financing sources to cover all costs from 2012 to 2025 until phase one construction is complete and ready for contracting.

The private company that enters into a contract with the public benefit corporation pays a lump-sum to collect revenues from infrastructure operations. The public benefit corporation continues to build phase two of the project. From the concession payment, it can either reinvest the money into phase two construction or repay the debt on phase one construction.

Scenario 2: Project sources and uses.

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In 2035, phase two construction is completed and NECSA leases separate ten-year O&M contracts on the Washington, D.C.-Philadelphia and New York City-Boston legs. When the contract expires at the end of ten years, the concession holder returns the track infrastructure to NECSA in the same state of repair in which it was received. The public benefit corporation enters into another ten-year O&M lease contract and the process continues.

For simplicity sake, assume the company that enters into the O&M contract is called Fast Track USA. This company will base its concession bid price on before-tax net operating income. Fast Track will leverage its equity investment with debt taken out against Fast Track’s real estate assets (e.g., retail and parking in stations). Some banks may be willing to loan money against government guarantees that are part of the concession agreement.

Fast Track USA and NECSA will negotiate the terms of the concession based on each partner’s risk mitigation strategy and goals for the project.

HSR trains will have run for five years at this point and will have assumedly reached stabilization, thus ironing out the inevitable bumps in the beginning of any operation. The existence of two-dedicated tracks for HSR removes the risk of congestion that currently challenges Acela ontime performance and frequency. The track infrastructure owner has full dispatching control over inter-city and commuter HSR trains on the HSR tracks. Again, this differs from existing Acela service because track use is too congested and Amtrak does not own pieces of the track.

Project Payback By 2065, the cumulative total money paid to NECSA from concession payments would equal thirty-five percent of the total capital costs after discounting at two percent to account for inflation. The ridership model assumes continued ridership growth each year as the population on the northeast corridor increases. Each subsequent concession is worth more than the previous one because the increase in operating income corresponds directly with the increased ridership.

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PRIVATE FINANCING SOURCES Private capital will enter in two stages: 1) construction and 2) stabilized operations. During the construction stage, government could tender a concession for a private contractor to build pieces of the line and then maintain it over a period of time. The contractor would profit by delivering the project at a lower cost than the government could and then earn a regular return from government payments on performance.

For example, the contractor would receive some amount of money for maintaining a specified quality level.

Once operations are stabilized, a private entity such as Fast Track USA (our hypothetical investor) would purchase the right to operate and maintain a specified portion of track over a period of time. Â The scale of this project means that Fast Track USA will likely be a consortium of several players, each bringing their own equity stake to the table. A review of the industry has revealed that a combined equity stake of $10 billion would be possible albeit a very large and complicated deal.

Consortium members will constitute infrastructure investors such as pension funds, insurance companies, investment banks with infrastructure funds, and independent non-bank affiliated entities that make infrastructure-related loans.

Pension funds are the largest group of infrastructure investors. Such investors have long-term term horizons and expect steady, relatively stable returns on investment (five to eight percent).

Historically, pension funds have invested through third party infrastructure funds in investment banks or private equity firms. Big financial service firms, including Goldman Sachs, Citigroup, Morgan Stanley, and JPMorgan Chase, have multi-billion dollar infrastructure funds.

Of late, however, pension funds have begun to bypass these specialist funds to find better returns. 40 Direct infrastructure asset purchases generate risk-adjusted returns in the 10-14 percent range. 41 Many deals are mixtures of co-investment, as in the case of the HS1 concession purchased by two Canadian pension funds. The downside to direct infrastructure investment is the need for the investor to have the capacity and expertise in place to manage the asset. For this reason, third party infrastructure funds continue to attract some investors; they are just moving away from the big financial service firms.

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JP Morgan Chase Building. 48

As the infrastructure investment industry becomes more experienced, investment vehicles are evolving to meet new investor needs and the realities of infrastructure asset investments. Investors increasingly prefer funds that focus primarily on improving the management of infrastructure assets and less on running an asset and flipping it to make a profit. 42 A number of US pension funds have adopted a policy that they cannot invest in investment-bank backed funds. In response to this movement, some of the larger banks are spinning off their infrastructure operations. HSBC already did this and Blackstone has begun the process.

Many investors are looking to independent non-bank affiliated entities such as Meridiam Infrastructure, Global Infrastructure Partners and Alinda Capital Partners.

Investment Market Analysis Investment in infrastructure funds increased from 2009 to 2010. In 2010, new capital raised into global unlisted infrastructure funds equaled $27.3 billion compared to less than $8 billion in 2009 according to Preqin. 42 Alinda raised $8.6 billion for a global fund in 2010. 43 Opportunities for private infrastructure investment abound as public sector investment faces increasing fiscal pressure. For example, European governments with debt problems are selling assets. 44 Spain plans to cut its debt and raise $10.5 billion by selling 49 percent of its airports authority. Similarly, the Greek government has pledged to raise at least $3.7 billion from the sale of state assets over the next three years. A risk of investment in transport infrastructure, relative to social infrastructure such as schools or hospitals, is the link to GDP growth. Cash flows from roads, ports, airports, and rail, are vulnerable to economic shocks and there is little an investor can do to completely mitigate this risk.

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Investors that are more risk-adverse are looking to European rather than Asian assets because of the predictability of returns. The risk in Asia is that infrastructure is largely held in public hands and investors have limited control over the political risk of a new government coming in and disavowing prior contracts. In contrast, Western countries have more democratic governments that are subject to legal contracts. The United States could capitalize on this growing industry if acceptance increases for public assets to be managed in private hands.

Use of Real Estate Investment Trusts for Private Capital in High-speed Rail Real Estate Investment Trusts are an alternative source of encouraging private equity to invest in infrastructure projects. A 2007 Internal Revenue Service (IRS) ruling changed the definition of real property, for assets including energy and non-building, non-machinery infrastructure, allowing REITs to invest in infrastructure. Investors might find infrastructure investments as attractive as real estate investments, with a steady cash flow returns.

Using a REIT structure for infrastructure investment would preclude a co-investment strategy or public-private partnership and provide the advantages of a typical REIT. These advantages include liquidity of REIT stock, access to capital markets, and taxation regulations, which allow a REIT to operate tax-free at the entity level as well as no tax on the sale of a non-U.S. taxpayers investment, encouraging foreign investors in American infrastructure. However, REITs can be seen as disadvantaged in terms of infrastructure investment, because shareholders cannot benefit from tax losses, REIT shareholders will be taxed on income that occurs through refinancing if they exceed the basis on the REIT stock, income must be classified as being “rents from real property.” 45 Classifying high-speed rail as a REIT would provide an additional investment vehicle that has access to the capital markets and opens up ownership to the public, which could be attractive to investors. Although investors might not see cash flow immediately, the REIT structure would allow cities to monetize their existing real estate assets to provide cash flow on future infrastructure investment. 46 An existing example is the Pittsburgh West Virginia railroad, which converted into REIT, paying out dividends of 4.7 percent to shareholders. Fortress Investment group also bought a portfolio of short line freight railroads (Rail America’s portfolio) intending to use a REIT structure for all rail assets. 47

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CONCLUSION The United States has the capacity to pay for high-speed rail in the Northeast by combining multiple financial tools and mobilizing both public and private sector support. The large capital investment ($100+ billion) will most likely only depend on grants to cover a part of total development costs, as the operating profit will be able to support significant amounts of debt. What separates HSR on the Northeast Corridor from all other proposals across the country is the likelihood that user fees will cover all operating costs and still leave excess cash to cover debt payments. The federal government can use a combination of grant, credit assistance, and tax code incentives to get the project off the ground and running. Some of these tools currently exist (e.g., TIFIA, RRIF, intercity high-speed passenger rail Private Activity Bonds), while others will need to be passed into law (e.g., US Infrastructure Bank). Led by the federal government, and supported through robust ridership demand, HSR in the Northeast can become a reality within the coming decades.

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5. THE METROPOLITAN ROLE

SECTION OVERVIEW When it comes to high-speed rail, cities matter. High-speed rail is not about connecting a station to another station, but rather a city to another city, and these cities are the portals through which HSR benefits can be captured and spread throughout the region. While it is not only highspeed rail that can bring economic success to cities, it is cities that have the ability to help high-speed rail reach its high potential. Previous chapters of this report have examined the potential ridership demand and funding sources based upon that demand. These ridership numbers are only possible because this high-speed rail project will connect tens of millions of people, tens of millions of jobs, and billions of dollars in spending power located in the numerous cities and stations along the Northeast Corridor. High-speed rail will create the potential for enormous economic growth in those cities, and in cities otherwise connected to those directly along the alignment. Because of the two-way relationship between high-speed rail and cities, it is critically important to understand what effects HSR will have on cities and their regions.

Learning from other systems, it has become clear that the transformative benefits of HSR connectivity will best accrue to those cities and metropolitan areas that are prepared. It is the role of metropolitan institutions, that is, the “metropolitan role,� to prepare and plan for HSR to maximize economic and social benefits. The Northeast megaregion accounts for 20 percent of the national economy: by maximizing economic output in the Northeast, the entire nation will benefit.

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STATION AREA REGENERATION (StAR) The success of high-speed rail can be measured through the qualitative and quantitative measures reviewed in the previous sections. One of the leading arguments for high-speed rail in the Northeast Corridor is the value of economic benefits that can accrue to the Northeast megaregion, and thus to the national economy. These economic benefits at the regional level are the aggregate of benefits accrued to the cities with high-speed rail stations. For this reason, it is important to understand how HSR will affect the places in which it stops on every scale: at the station, in the station area, across the city, and throughout the region.

The ability of cities to capture the full benefits of high-speed rail depends upon a high degree of connectivity between the greater metropolitan area and the high-speed rail system. This report recommends using a strategy of station area regeneration—StAR—to act as the transition of local station development to greater regional impacts. StAR is similar in concept to transit oriented development (TOD), however the effects are greater when it comes to both economic scale and geographic reach.

While TOD is considered to affect conditions within a five to ten minute walk surrounding the station, StAR is considered to have a radius of a one-hour ride from the station.

TOD’s influence reaches a 5-10 minute walking radius.

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TOD versus StAR

StAR’s influence can reach as far as a one-hour transit radius.

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StAR integrates the physical, economic, and demographic elements of urban transformation that can occur due to the construction of a highspeed rail station and the enormous increase in connectivity to the rest of the Northeast Corridor. The changes are felt most dramatically in the immediate station area, with new demand in the area for office space, housing, retail, and services, creating increases in land value and leading to construction of new buildings to meet this new demand. The term ‘regeneration’ suggests that these changes to the station area are far greater than just a set of new buildings, encompassing new activities, public spaces, transit options, and attractions that can draw a variety of people, not just travelers, to the station area. Regeneration is the creation of urban activity and vitality drawing out the market potential enabled by greater connectivity to other cities. Regeneration arising from HSR not only enables traditional forms of investment to succeed, but also opens up entirely different scales of market opportunities by widening the range and threshold for goods and services made accessible to each city served by the HSR system.

Capturing the Value Added by High-speed Rail Through StAR

Patterns of Development around StAR.

Station

If cities are prepared for the impact of HSR, they can capture value from this economic activity. During the design, construction and implementation of high-speed rail in cities, physical and economic changes are likely to occur first at the station and in the area around the station. The economic and demographic effects of high-speed rail will ripple outward into the region as the land, office, and housing markets respond to new transportation and economic opportunities. As these changes radiate from the station area, they create significant economic benefits, a portion of which can be captured by cities, counties, states, and the federal government to help finance HSR capital and operating costs, or to support additional municipal and regional services.

Station Area

City

Suburbs and Region

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However, the distribution of benefits beyond the immediate station area is strongly correlated to a number of factors, primarily regional connectivity. Metropolitan institutions must be aware of these factors and prepare accordingly to capture the full benefits of HSR.

Station Building & Supporting Retail. 1

The value created by high-speed rail starts at the station. In the station, economic activity is created by the construction of the station itself, a task that can employ hundreds of people through planning, development and construction. After completion, ticket sales and supporting retail within the station, which can include a full-service mall-like shopping experience, create value through sales tax, and revenue tax for the city, state, and federal governments.

Land in the area around the station can see the largest increase in value because it is nearest to the station and the transit connections. Land close to the station is attractive to office, retail, and residential uses, and the competition for the land raises its value. When underutilized land in the station area is bought and developed, it generates land transfer taxes and development fees, creates construction jobs and spending on construction, and increases real-estate tax assessments. Existing buildings in the area will also increase in value as their desirability increases, and they would see changes in use, including physical renovations and conversions.

Station Area Commercial, & Retail. 2

In the area immediately around stations, land uses will most likely focus on the types of activity that can pay the most for the land–office and retail. Residential development in this area is likely to be high-density units, which can compete with office space for rent. Cities that require mixed use or higher residential densities are more likely to benefit from the added activity created by demand for residential uses.

City Residential & Retail. 3

In the neighborhoods further from the station, residential demand will increase as people looking to be connected to HSR flock to the area. This will create the demand that leads to new residential construction and will further increase real estate and transfer tax revenues and continue to promote the residential density that drives demand for supporting services.

In the larger area around the high-speed rail station, there may also be an increase in residential demand. Companies that create new economic activity in the city surrounding the station area will increase hiring and bring new residents to the metropolitan area. Some of these residents may choose to live in the station area, others elsewhere in the city, and still others in suburban areas.

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Suburban Community Real Estate. 4

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C ASE STUDY StAR Success: Lessons from Abroad High-speed rail can enable enormous economic opportunity, but alone it does not assure economic success. The years of experience arising from the introduction of HSR in Europe show that most European cities – of many sizes, functions and locations –have experienced great economic advantage from their new connections to the European high-speed rail network. However, there have been examples of cities that have not gained the full economic advantage from their new high-speed rail connectivity. The United States is in a unique position to learn from the successes and missteps of existing HSR systems. European case studies, presented in this section, illustrate the importance of creating coordinated urban policies and investments to capitalize on the accessibility HSR provides. Connecting the workforce of the region with the high-speed rail station area by extensive transit systems is essential. Smaller and less dominant cities especially must establish policies that create locational competitive advantages to attract new businesses and residents.

Gare de Lille-Europe, Lille, France. 5

Nagoya Station, Nagoya, Japan.

6

Two StAR case studies that exemplify capturing economic benefits through StAR are the Gare de Lille-Europe station in Lille, France, and Nagoya station in Nagoya, Japan. The Gare de Lille-Europe spurred major economic development in the surrounding area. Commercial, retail, and housing markets were catalyzed by the new connection to HSR. While the Gare de Lille station was used as the catalyst for development, the metropolitan authorities took the appropriate steps to realize the physical potential created by the HSR effect. Here, the development of the station was planned for within the context of a larger station area regeneration (StAR) plan. The Nagoya station was successful at using value-capture techniques to retain the economic growth that was designed in tandem with the new HSR station. The value added by the Nagoya station and connection to HSR was captured successfully due to public ownership of the land, and coordination with large corporate employers to facilitate occupancy rates in the new development.

Equally important in lessons learned from other countries was exploring StARs that were not fully realized, and identifying what could be improved upon in the Northeast Corridor. The Hauptbahnhof in Berlin, Germany is a commercial success as far as the station goes, but the immediate area around the station did not develop as planned for and expected. In contrast to Gare de Lille-Europe, the station is not well connected to the rest of the city or region, either by pedestrian access or by intermodal connections. Additionally, the site selection for the station and subsequent development expectations were unrealistic given local economic conditions. The Guadalajara-Yebes station, in Guadalajara, Spain also did not spur economic development, either in the station or in the surrounding area. Again, the flaw with the site selection for the station was a lack of connectivity with the city center. Both the Berlin Hauptbahnhof and GuadalajaraYebes stations illustrate the reality that an HSR connection on its own will not spur great economic development. Stations must be planned for within the greater context of the city and region, and it is the responsibility of metropolitan planning authorities to ensure this is true for their city and station.

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Demand for housing in those areas will create real estate and transfer taxes in those communities. Areas with better transit connections to the high-speed rail station will experience a greater increase in demand and land value due to their increased accessibility. The communities that will experience these increases in land value, and consequent increases in sales, real-estate, income, payroll and related taxes can put policies in place to capture some of that value if they desire. Revenue could be collected through tax increment financing, special assessment districts or revenue diversion into a special fund. Cities will have the opportunity to use this added revenue to continue to create value for businesses and residents.

How to Spread Value Creation Throughout the Entire Metropolitan Area Based upon the knowledge gained from exploring a variety of case studies, there are certain crucial factors that determine the success of a StAR: centrality (both regional and within the city), connectivity to the greater area population, appropriate incentives for development around the station, and coordination with a regional plan and strategy. These criteria define the four principles of StAR success that metropolitan planning authorities must use to ensure the realization of the HSR effect on the local level.

1. Foster Centrality For HSR to be fully integrated within a city and region, the station must be placed in a distinctive location that can take advantage of the increased passenger activity. Centrality is the key characteristic of the right location, which can be the center city, the center of the airport, or even (although it has proven more risky) the mixed-use and employment center of a new designated development area. A centrally-located station is a critical prerequisite to the ability of HSR to catalyze economic development within metropolitan regions. The HSR effect occurs when industries and labor pools are highly connected to the point that agglomerations and increases in productivity can occur at the megaregional scale. As such, an HSR station must be located within dense concentrations of industries and people that are HSR-synergistic to maximize the potential benefit. The greater the concentrations, the greater the potential for agglomerations, increased productivity, and ridership. In several successful StAR initiatives in Europe and Asia, planners located the HSR station in central business districts where tens of thousands of jobs were within walking distance to the station.

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• Unite the entire system: All stations, including HSR stations,

should be planned with the understanding that the success of every mode depends upon, and improves upon, the connections with other modes. Intermodal planning should consider every level of connection, from pedestrian and cycling, to buses, rapid transit, regional rail and high-speed rail. Stations are the points at which the different modes of transportation are woven into a complete network, and every network should have at least one multi-modal station that unifies all modes under a single roof.

• Make transfers easy: Planning for the passenger experience

is a key priority in intermodal connections. Platform design, station layout, and scheduling should provide the shortest, most convenient, indoor transfer possible. Integrated fare purchase and collection among all systems is ideal. In successful stations, the transfer from high-speed rail to each of the other available modes is quick, simple, and short.

• Provide information: Successful intermodality is enhanced by

real time information and clear scheduling. When passengers are provided with reliable travel time estimates, they can make better choices and tailor their travel mode to their travel needs by choosing the most efficient mode available at the station. Realtime arrival and departure information should be readily available to passengers and potential passengers. These systems should also take advantage of the potential to integrate applications that also communicate information about resources, events, and services in the area.

• Plan for a balanced transportation system that reaches as many

parts of the metropolitan region: To be successful in bringing the economic benefits of HSR to a metropolitan area, there must be short travel times and one-seat rides to a large majority of the area’s residents and workforce. Major destinations should also be made transit-accessible. One Dutch transportation planner used the analogy of a bowl of fruit to describe the values of intermodalism. All fruit should be of equal quality, allowing the user to make a choice based on their own true preference. In a balanced system, all modes of transportation are equal, with similar standards for a high-quality experience.

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FOSTER CENTRALITY

MAXIMIZE CONNECTIVITY

Case study cities examining the effects of high-speed rail in the Northeast Megaregion (above).

INCENTIVIZE DEVELOPMENT

DEFINE REGIONAL VISION

Tourism destinations and hospitality amenities, as well as large residential populations, were also adjacent. By selecting a location that is the center of economic and cultural activity—and typically physically central by default—an HSR station maximizes connectivity between the end users of the system.

2. Maximize Regional Connectivity through Intermodal Sytems Opposite page: Case study cities examining the effects of high-speed rail in the Northeast Megaregion; Philadelphia, PA 7 (top), Hartford, CT 8 (bottom).

Few journeys begin and end with high-speed rail. To arrive at her end destination, a passenger will likely complete the “last mile” via public transit, a cab, walking, or a combination of modes. When an HSR station is integrated into an extensive transit system, its ridership catchment area is increased and the extents of the HSR effect are amplified. By plugging HSR into the rich transit systems of New York and Washington, D.C. these destinations are absorbed into the megaregional commuter shed. HSR stations are most effective when they are hubs that anchor a multimodal transit network.

The following four principles contribute to the development of effective public transit systems that complement the car-serving streets, roads and highways currently so heavily relied upon within metropolitan areas.

Heavily influenced by the best European case studies, these principles have practical application not only in this report in envisioning the future of HSR in Hartford and Philadelphia, but for any city seeking to improve regional transit connectivity.

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3. Incentivize Development A well-planned station area creates ideal conditions needed for HSRsynergistic uses to thrive, and it creates the regulatory framework necessary to make development viable. Uses that coalesce strongly with HSR vary depending on city type and the distance from an HSR station.

In major cities like New York, time-sensitive industries, industries that rely on face-to-face interaction, and tourism will benefit from locating immediately adjacent to an HSR station. Accordingly, major cities typically zone for or incentivize offices, institutions, hotels and convention centers in the immediate station area. Secondary cities akin to Springfield in Massachusetts have typically experienced commute-based residential synergies and expanded tourism activity. For example, the arrival of HSR in Ciudad Real, a small city in southern Spain, brought the city within a one-hour commute of Madrid. Ciudad Real’s affordable real estate attracted an influx of commuters and the city experienced a residential boom.

High-speed rail creates a range of benefits for businesses. It greatly expands both the accessible workforce and the number of companies with which businesses can communicate in person for business purposes.

Cities should capitalize on their new HSR connections by putting proper zoning in place to reduce permitting delays, bringing down the costs of construction and occupancy, increasing density allowances and reducing parking requirements and other measures. Underused or vacant parcels, which have previously been a hindrance to development, can in the case of HSR and StAR development be considered an advantage.

It is important for cities with high-speed rail stations to prepare for residential growth in the station area. A residential population with critical mass in a neighborhood creates demand for services and retail. Demand for goods such as groceries, clothing, and hardware, and services such as restaurants and salons, draws businesses to neighborhoods. Planning for a strong downtown population within the station area is important. This residential population creates the demand for supporting services that create a lively and exciting neighborhood around the station that feels safe, and is safe, at all hours and for all people.

4. Define a Shared Regional Strategy This report proposes a high-speed rail network that serves Northeast cities. All of these cities should adopt the above-mentioned strategies to attract new people, companies, and economic opportunities.

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These cities will be collectively competing as an economic unit with the other global megaregions in Europe, Asia, South America and also other US megaregions that build HSR systems. Every city faced with the potential of HSR service needs a vision, true to its own special set of assets and attributes, that can help it establish goals and objectives for achieving the full economic, social, and environmental benefits of HSR. This vision needs to be translated into a regional plan and action strategy that identifies policies, strategies, investments and flagship projects.

Case Studies for StAR in the Northeast Megaregion To illustrate how the principles of centrality, intermodality, incentiving development and regional planning should be applied to the many cities along the proposed alignment, the PennDesign 2011 studio explored two StAR case studies. Philadelphia, PA was selected as an example of the major cities along the alignment (such as Boston and Washington, D.C.), and Hartford, CT was chosen to represent the many smaller cities also located on the alignment (such as Wilmington and Trenton). By exploring the existing conditions and characteristics of each city, and devising a consequent StAR plan, the translation of the StAR principles from theory to reality is illustrated, and can serve as a model for implementation in other cities in the near future.

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PHILADELPHIA The Market East Station site is in the center of the Philadelphia region’s knowledge economy.

High-speed Rail in Philadelphia, PA The current Northeast Corridor right-of-way approaches from Wilmington, Delaware in the southwest as a four-track main line, with SEPTA commuter services running on the outer tracks. At Arsenal Junction, commuter trains separate from intercity traffic, with the latter entering the lower level of 30th Street Station and continuing northward, and the former entering the upper level of 30th Street Station and continuing eastward through Center City onto the former Reading Railroad system of commuter lines. All northbound traffic passes through Zoo Junction, where the right-of-way once again takes the form of four electrified tracks plus one or two non-electrified freight or service tracks en route to Trenton and points north.

Arsenal and Zoo Junctions date from the heyday of the Pennsylvania Railroad, and are not suitable for high-speed service. The 2010 PennDesign report proposed that the HSR alignment depart the legacy NEC at Eddystone, proceed in a tunnel to a new station at Philadelphia 170

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International Airport, cross the Schuylkill River in a new tunnel or pair of tunnels, follow the street grid north to Market Street, where another new station would be constructed beneath or adjacent to the current Market East regional rail station. The proposed alignment remains underground beneath Northeast Philadelphia until it ultimately rejoins the existing NEC near Bridesburg.

The 2011 report does not change the previously proposed alignment, but rather treats with greater precision the alignment’s approaches into the new Market East Station. In the scenario described in this section, two tunnels—one under 10th Street for southbound trains, one under 11th Street for northbound trains—fan out to serve an eight-track station cavern before the tracks continue on their way northeast. With the outer two tracks remaining perfect straightaways beneath the city’s street grid, the station can accommodate special services that do not stop in Philadelphia, a variety of express and regional services, as well as commuter and airport shuttle services.

Regional Strengths and Opportunities

The Market East Station is situated in the center of the largest job cluster in the Philadelphia region.

The Philadelphia metropolitan area is one of the largest in the nation.

Halfway between the economic and political capitals of New York and Washington, over six million residents live in the lower Delaware Valley in Pennsylvania, New Jersey, or Delaware, and of these six million, 1.5 million live within the city of Philadelphia.

Market East Station

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The region is home to numerous prestigious academic institutions, such as Swarthmore, Haverford, and Bryn Mawr Colleges, as well as Villanova University, Saint Joseph’s University, Drexel University, Temple University, Jefferson University, and the University of Pennsylvania. Health care, pharmaceuticals, and tourism are all key industries in the Philadelphia region.

The 2010 census showed that the city population of Philadelphia has stabilized after 50 years of decline, and the Delaware Valley Regional Planning Commission has projected modest but steady growth in the city and regional populations over the next twenty years. With population increase and in-migration projected in the long term, there is considerable opportunity to re-concentrate development in Philadelphia. The city’s population peaked at over two million in the late 1950s, and much of its infrastructure—though aging—was built to serve a population 33 percent larger than the one currently living in Philadelphia.

City and Station Area Strengths and Opportunities Philadelphia is no longer the “workshop of the world” but it remains an important hub for commerce, culture, arts, and innovation. Directly above the Market East Rail Station is the newly-expanded Pennsylvania Convention Center, home to the east coast’s largest ballroom and hundreds of thousands of square feet of exhibition space.

Public transportation in the Philadelphia region connects 3.6 million people to the Market East site with a one-seat ride. Strong connectivity to the region helps spread the benefits of HSR to the entire metropolitan area.

SEPTA Regional Rail Market-Frankford Line Broad Street Line SEPTA Bus Routes PATCO New Jersey Transit Buses Population Density Low

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High

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The Chinatown cultural district is adjacent to Market East to the north.

While Market East may have historical significance to the development of the city as a whole, it has been bypassed as the geographic center of the city’s economy. The primary office district in Philadelphia had moved westward to Broad Street by the end of the 19th century, and had moved even further west by the mid-20th century. The result is an asymmetrical skyline and the considerable under-use of a downtown district every bit as well-connected as its more successful counterpart on the other side of City Hall. A large number of parcels near Market East are used for surface parking, while many more are home to lower-end retail. Despite this, zoning in the area remains permissive enough to support nearly any proposal to redevelop the area.

The Market East Station building and site are located within a transit rich neighborhood.

The single largest opportunity to regenerate the station area is The Gallery. First opened in 1977 and expanded in the 1980s, The Gallery at Market East was revolutionary for its time in that it was a suburban-style shopping center built in an urban setting. It remains a very well-trafficked and busy shopping center today though above ground it appears to be a complex of windowless boxes which do little to invite pedestrian traffic or suggest the presence of a train station and rich mix of retail.

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Transportation Strengths and Opportunities Philadelphia has a long history of rail ridership and a strong “train culture.” Philadelphia is currently served by all of Amtrak’s Northeast Regional and Acela Express trains that traverse the Northeast Corridor, as well as additional service to New York on Amtrak’s two state-sponsored routes in Pennsylvania, the Keystone (to Harrisburg) and Pennsylvanian (to Pittsburgh). The city’s regional rail network is among the most extensive in the nation, with thirteen lines serving over 150 stations and carrying over 329 million passengers annually.

In addition to regional rail, Market East is served by Philadelphia’s eastwest heavy rail transit line, the Market Frankford subway/elevated line, and through a pedestrian interchange, the Ridge Avenue spur of the north-south Broad Street line. The Juniper Street terminus for SEPTA’s Subway-Surface Trolleys, serving west and southwest Philadelphia, is also nearby, as is the Delaware River Port Authority’s PATCO train to Lindenwold, New Jersey, via Camden. Finally, at street level, Greyhound and Peter Pan bus lines maintain a terminal structure that also serves New Jersey Transit express commuter buses and seasonal shore services.

Looking beyond Center City, Philadelphia International Airport sits at the city’s southwest extremity. It serves as a hub for US Airways and UPS air cargo, but it is also served by many other domestic and international carriers. It recently received a Record of Decision on an expansion plan that would add a new commuter terminal, one new runway, and extensions to several of its existing runways.

Many of Philadelphia’s transportation opportunities can begin to be realized at a purely administrative level within SEPTA, such as a more user-friendly and mode-neutral fare collection system. The city’s bus network is extensive, but on-time performance suffers from inefficient stopping patterns and streets that offer little or no priority to transit vehicles. The city has only one major arterial leading northwest, the Schuylkill Expressway, which is often congested but which cannot be easily expanded for engineering, cost and environmental reasons.

Interstate 95, the highway which parallels the Northeast Corridor, is also regularly congested. This elevated structure runs through many neighborhoods along the waterfront, including the historic Old City, which poses a significant barrier to expansion. Many of SEPTA’s commuter rail lines have been truncated repeatedly since the authority’s inception, further compounding the strain placed on the region’s roadways.

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The proposed Market East Station building connects three major rail transportation systems under one roof: the HSR network, the MarketFrankford Line, and the Regional Rail.

The airport’s impending expansion presents an opportunity to integrate airport operations within the larger megaregional mobility system.

Currently, the fourth busiest domestic destination from Philadelphia International is Boston Logan Airport. Implementation of HSR could make rail competitive enough with air travel that capacity could be diverted to more cost-effective routes for airlines, such as long-haul domestic (Los Angeles is the 10th busiest destination) or international flights. Whereas the airport is currently a 20-minute train ride to the nearest transfer point on the NEC, HSR can bring the corridor directly to the airport, plugging it into the potential market for codeshare transfers already in use at Newark Liberty Airport just 75 miles to the north.

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Getting StAR Right in Philadelphia Foster Centrality With the arrival of high-speed rail, Market East will become Philadelphia’s gateway to the economy of the Northeast megaregion. Innovative ideas, visionary investors, creative professionals, and groundbreaking researchers will pass through Market East in the crowds of tens of thousands per day. The physical flow of the knowledge economy presents Philadelphia with enormous regeneration potential, but only by following principles of excellent station design will this potential be realized. A high-speed rail station’s “true place-making potential depends on factors such as centrality, connectivity, intermodality.” 9 Getting station design right at Market East is prerequisite to the performance of the station area regeneration strategies described in previous chapters. The chief purpose of high-speed rail is to connect cities. Because stations serve as the portals to cities, the quality of design at this scale will be testament to success of the system as a whole.

Centrality is Market East’s most important design quality. It is physically at the heart of the city, and it is also central to the city’s commercial core, its tourism industry, and its arts and entertainment district. Market East is at the center of Philadelphia’s dynamics, its flows, its functions, and its magnetism.

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The Market East Station site is connected to the major northsouth and east-west transit lines in Philadelphia, and to the Regional Rail network. These transit options, along with City Hall, Reading Terminal Market, and the Convention Center are all located within a 7.5 minute walk.

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All of the anchors to Philadelphia’s knowledge economy are located either within a ten-minute (1/2 mile) walk or accessible via transit from Market East. 10 In a city where 35 percent of Center City residents walk to work and 26 percent of Philadelphians take public transit, pedestrian and transit accessibility are crucial. 11 The central business district, which is home to 267,000 jobs, is concentrated four blocks west on Market Street. 12 The convention center abuts Market East and can be accessed from within the station. The city’s main shopping district, anchored around Chestnut and Walnut streets, is one block away. Old City, Philadelphia’s primary arts and entertainment district is seven blocks away. Knowledge economy anchors that are not within walking distance from Market East can be accessed via a one-seat transit ride. This includes the University of Pennsylvania, the University of Pennsylvania Hospital, Drexel University, Temple University, Villanova University, Saint Joseph’s University, and the Navy Yard. Further, over three million people live within a one-seat transit ride to Market East.

Maximize Regional Connectivity through Intermodal Systems As Philadelphia’s gateway to the megaregion, Market East must efficiently connect arriving passengers to the last-mile modes that take them to these destinations, and vice versa. No trip begins and ends with highspeed rail. As the San Francisco Urban Planning and Research Association (SPUR) points out, the provision of “intermodal links to allow travelers to connect seamlessly between [the high-speed rail] platform and other transportation” are critical to the success of the system. 13 While many destinations are within walking distance from Market East, some trips will require transit to connect the passenger to her final destination.

Quick, simple, and close transfers will optimize intermodal connectivity at Market East.

The primary variable is distance. All seven subsurface transit platforms are within a five-minute (1,300 ft) walk from the high-speed rail platforms (with the exception of the Broad Street Line, which is a seven-minute walk). Surface-level buses and trolleys are located curbside, directly outside of the grand hall. The proximity of these transfers shaves valuable minutes off of a passenger’s overall door-to-door journey.

Ideally, all of Market East’s intermodal connections would be under one roof. However, the incremental development of Philadelphia’s transit system resulted in a patchwork of transit stations that are adjacent to Market East, but lack a centralized transfer point.

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Opposite page: The availability of land that is ready for redevelopment is another important development consideration. The Market East site is surrounded by surface parking and unterutilized land that will dramatically increase in desirability for office and commercial use with the increase in connectivity created

by HSR.

The new Market East Station would enhance an existing subterranean concourse level that spans seven blocks from the 8th Street PATCO/MFL station to City Hall Station. Design strategies become necessary to ensure that navigation of the concourse is intuitive, legible, and safe. These will include way-finding signage that includes distances, color coordination, lighting, and the provision of maps. Real-time arrival information at platforms and on mobile devices will also improve transfers, especially in the case of buses. When passengers know when to expect a bus, they put more trust in the system and are therefore more likely to rely on it.

Incentivize Development

Opposite page: Zoning is a major element of incentivizing physical development. Parcels with permissive zoning are easier to plan for and develop. The Market East station site already has permissive commercial and mixed-use zoning with high building height allowances.

Certain uses coalesce with high-speed rail to greater degrees than others.

SPUR identifies “destination-oriented uses such as office complexes, universities, hotels, convention centers and major retail facilities” as the most synergistic. 14 Accordingly, Market East’s program consists of uses exhibiting the strongest synergies with high-speed rail. Like the JR Towers in Nagoya, Japan, time-sensitive businesses that are connected to a megaregional economy will benefit most from having high-speed rail just an elevator ride away. This report proposes that a new 1,200-foot Class-A office tower rise above the east wing of the great hall, eclipsing the Comcast Center as Philadelphia’s new symbol of economic vitality.

The tower’s podium and point massing would allow for 8,331-GSF open floor plates that can be configured any number of ways. Depending on tenant demands, any given floor could accommodate a single tenant, two large tenants, many small tenants, or any array in between. The bulk of the tower is sited on the southwest corner of site.

In total the high-rise creates an additional 575,000 square feet of office space. The chief intention is to respect Market Street’s build-to line, and by doing so create a monumental presence on Philadelphia’s original commercial avenue. The tower fulfills the vision of Philadelphia’s great post-war planner, Ed Bacon and his original intent for Market Street East: soaring office towers above a vibrant retail street. This development also adheres to William Penn’s original vision for Market Street as Philadelphia’s decumanus: to be the city’s primary commercial spine.

A 500 room hotel rises above the west wing of the great hall. With in-building connections to high-speed rail and the newly-expanded convention center, it occupies a highly advantageous site and stands to absorb a share of the 2,000 hotel rooms the convention center expansion is estimated to generate. 15

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Station hotels provide a novel lodging experience, analogous, yet superior to an airport hotel. In Zaragoza, the 256-room Hotel Husa Puerta de Zaragoza overlooks the train hall. Guests have the unique luxury to watch trains arrive and depart, and passengers shuffling and sorting through the crowds. Hotel Husa targets business travelers—and for good reason.

The hotel is situated at the doorstep of Zaragoza’s gateway to Spain, and it is the main launching point for travel within the city. With the arrival of high-speed rail in Philadelphia, these conditions will be analogous to Market East.

Passenger-serving retail is integral to any major train station. Healthy flows of pedestrian traffic at all hours of the day combined with an audience of waiting passengers make for an ideal retail setting. The retail strategy at Market East is dichotomous. The interior works like a European square—retail frames a central public space where sitting, lingering, and people-watching occur. The exterior works like a traditional street; as retail meets the sidewalk, and outdoor room is created. The intention is to integrate Market East into the fabric of the city. The entire retail program includes 12,000 GSF, consisting of twenty-four 500-GSF boutiques. A boutique module is most appropriate for passenger-serving retail. Cafes, newsstands, restaurants, shops, and other passenger-serving retailers do not require large floor plates. The provision of seating in the grand hall obviates the need for food and beverage retailers to provide large quantities of seating within their space. Large-scale retail is intentionally avoided as not to compete with the Gallery, and to preserve Market East’s essence as a train station, not a shopping mall.

The Market East program creates strong synergies between high-speed rail and coalescent uses, and integrates them within the layout of the station and the fabric of the city. Through synergy and integration, value premiums on leasable square footage are created, and thus value capture potential is maximized.

Define a Shared Regional Vision The plans for an effective StAR in the Philadelphia region requires the cooperation of the city of Philadelphia, the surrounding suburban counties—Bucks, Chester, Delaware, and Montgomery in Pennsylvania, Burlington, Camden, Gloucester, and Mercer in New Jersey, and Kent and New Castle in Delaware—the State of New Jersey and the Commonwealth of Pennsylvania, and the Delaware Valley Regional Planning Commission. By working together to plan for HSR at the regional level, these entities can optimize the potential benefits of the HSR to create the maximum economic benefit for the entire metropolitan region.

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The preparations for HSR and the increased connectivity of the Market East station area, station building shown in orange above, could create the demand for infill development, shown in white above. This infill development could generate millions annually to the city’s tax rolls while providing a more vibrant place for people to live and work.

Conclusion HSR at Market East is the catalytic event that the city of Philadelphia and the greater Delaware Valley region have been awaiting for decades.

Located at the heart of a metro region of six million, with substantial regional transit, Philadelphia is poised to radiate the economic benefit of the transformative investment of HSR miles beyond the station itself.

With the right zoning, development incentives, and regional vision, Philadelphia and the region can be a model for what HSR can do for America’s large, urban centers and metropolitan areas.

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HARTFORD

High-speed Rail in Hartford, CT Hartford was featured on the 2010 PennDesign HSR Studio Report alignment as a mid-point between New York City and Boston (a second Shoreline route would use the existing New Haven Line rightof-way through Stamford and Bridgeport to New Haven, and then on to Providence.) After leaving New York City, the proposed new rail alignment crosses Long Island to Ronkonkoma, then makes a sharp turn north to cross Long Island Sound to Stratford, Connecticut. From there the alignment travels along existing rail rights-of-way (both abandoned and the active ConnDOT railway used by Amtrak), highway medians, and through highway interchanges to Hartford. Approaching Hartford, the alignment takes advantage of the I-84 highway reconstruction proposal to head underground through downtown to a station that connects to the existing Union Station and provides new entrances closer to the heart of downtown.

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The 2011 HSR alignment connects Hartford to the high-speed rail line, and includes an electrified, conventional rail line to Springfield.

This dramatically reduces travel times to the megaregion and increases the available commuter range. Boston and New York are both accessible from Hartford within an hour.

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Hartford is at the center of the Boston-New York Region and the Springfield-New Haven corridor.

Under the city the tunnel forks, allowing trains to head north to Springfield, MA, via Windsor and Windsor Locks entirely on existing rail right-of-way, and then on to Boston, or to head east across Tolland County using highway rights-of-way for a direct route to Worcester, MA, before connecting to Boston.

Between Hartford and Springfield and back to Worcester the proposal makes use of existing rail rights-of-way. While high-speed rail rolling stock could travel on the track with modest upgrades (including electrification), it would take a full realignment to improve speed from the existing service. This proposal includes provisions for the electrification of track between Hartford, Springfield and on to Worcester and uses existing travel speeds on this portion of track. The use of rail and highway right-of-way to connect from Hartford to the Boston area provides for a reasonably straight alignment using the shortest path between the two places with speeds up to 160 miles per hour.

This year’s PennDesign studio examined the draft alignment from the 2010 report and fine-tuned the alignment between New Haven and Hartford using the same principles of that 2010 report: Create the straightest, and thus fastest, alignment possible utilizing as much existing right-of-way as possible; avoid private properties to minimize disturbance

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to individuals and communities; connect cities to the rail that will add significantly to the value of the HSR project; and where possible, connect the downtowns of those cities to realize the five goals of station building development also outlined in the 2010 PennDesign report.

In this report, the details of the rail connections to Hartford are adjusted between New Haven and Hartford and dramatically improved by creating dual options for high-speed rail trains to make trips to Boston directly or via Springfield, expanding options for Hartford travelers and connecting north-central Connecticut and Springfield to the HSR network.

Hartford is in the center of a host of existing rail and highway rights-ofway that make a convenient connection between New Haven and Boston with minimal disturbance to surrounding areas. But these engineering considerations are not the reason that Hartford is an excellent city for a high-speed rail station or the reason the city is featured here. Downtown Hartford and the Hartford metropolitan region possess a host of strengths that make the city a desirable choice for HSR.

Union Station (right) is located between the major job centers of downtown. 60,000 jobs are within easy walking distance of the station.

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Regional Strengths and Opportunities Hartford is located halfway between the financial and knowledge economy centers of New York City and Boston. Businesses in these two major cities could capitalize on the less expensive land and rents in Hartford to create a place to meet halfway or locate operations easily accessible with a mere one hour trip. Hartford would be an attractive option for near-shoring, back offices, smaller divisions, and support operations that require easy connections to the major offices in NYC or Boston. Greater utilization of Hartford frees office space in those more expensive cities for expansion of headquarter functions. This could also help stabilize office rents in New York and Boston in the long-term.

The Hartford region is home to 1.2 million people with some of the highest per capita income and quality of life in the country. The employees of the Hartford region are 135 percent as productive per capita as the national average. 15 There are existing business agglomerations in aerospace/aeronautics, high-tech manufacturing, insurance, and government, that represent a large portion of the region’s highly-skilled, creative workforce.

Nevertheless, the region is not tightly connected via transit. Downtown Hartford is seen by many as an event destination; area residents visit for concerts and basketball games at the XL Center in downtown, for parades and holiday events in Bushnell Park, but they do not view it as a place for a regular shopping or business visit. Rebuilding the core of the city around the high-speed rail station and creating a vibrant residential neighborhood with regionally attractive retail and entertainment will create the opportunity to reconnect the entire region to the city.

City and Station Area Strengths and Opportunities Hartford is the capital of the state of Connecticut. As one of the city’s largest employers, state government has a vested interest in helping Hartford become the best city that it can be. The insurance industry of America started in Hartford, and downtown Hartford is still the leading employment center in the region for insurance. There are 120,000 16 jobs in the city of Hartford, making it the largest employment center in the state of Connecticut. More than 60,000 jobs are located with 1.25 miles of the Union Station, meaning that more than half of the total employment is located within the station area. These existing companies in Hartford could take advantage of the high-speed rail before any new company opens its doors in the city. Every morning nearly 112,000 17 commuters travel into the city of Hartford from the region, creating strong ties between the region and the city.

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While there are still many companies employing tens of thousands of people in downtown, there is much room for growth in the city, especially in the built environment. A real-estate bubble burst in the city in the 1980s, leaving many office buildings under utilized. This substantially lowers the barrier to entry for a company looking for any variety of available office space at a reasonable rent with immediate occupancy.

Parking became big business in downtown and many buildings were demolished to make room for more parking. A soft site analysis found that there is enough land to accommodate significant new commercial development in the vicinity of the new HSR station as well as satisfy the current demands for additional residential units.

Downtown Hartford has a small residential population, with only an estimated 1,500 people living in the central business district. There is currently strong market demand for rental housing in downtown Hartford, as evidenced by new construction and waiting lists at existing buildings.

I-84 Reconstruction Presently, downtown Hartford is separated from the Connecticut River by Interstate 91, and the city is bisected from east to west by Interstate 84.

I-84 is an elevated highway between Capitol Avenue and High Street.

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The proposed I-84 realignment would remove the elevated highway from downtown, create an open flow between east and west downtown areas, and create valuable land in the immediate station area.

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As it approaches downtown from the south, it passes 250 feet from Union Station – the northbound lanes are elevated above Asylum Street and the southbound lanes are sunk below. The existing rail line at the edge of Bushnell Park and the highway and on/off ramps occupy more than 10 acres. Ramps connecting to Capitol Avenue form the western edge of Bushnell Park by the state Capitol.

The elevated portion of I-84 needs to be reconstructed or rebuilt entirely within the next 15 years. A 2009 study sponsored by the City presented three alternatives and recommended a preferred alternative.

The preferred alternative has three major components that would create dramatic benefits for downtown Hartford for a similar cost to rebuilding the elevated highway as-is: it lowers the elevated highway to an at-grade structure, lowers the railway and moves it to the west side of the highway, and removes the on/off ramp complex. Lowering the highway removes a physical and visual barrier between east and west downtown. Due to the topography of the area, as the elevation rises from downtown into west downtown, the preferred alternative recommends covering the highway between Broad Street and Asylum Street with an at-grade deck.

Hartford is the largest single employment center in the state of Connecticut. Though much new economic activity has shifted to the southwest of the state, close to New York City, the Hartford region’s job cluster is still the state’s largest.

This further removes the barrier between east and west downtown and makes the newly available acres more attractive for air-rights development.

Moving the railway to the west side of the highway eliminates the need for the rail, highway, and ramps to crisscross each other multiple times.

The railway would also fit under the at-grade highway deck, allowing the city to remove the heavy bridge over Asylum Street. Removing the on/ off ramps would create 15 acres of developable land in the prime location downtown, across the street from Union Station and next to Bushnell Park.

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This report recommends making the most of this preferred alternative’s plan with a few alterations. Dropping the highway to the at-grade level and removing the ramps to open up prime acres for development are excellent ideas that will be even more valuable to the city when HSR is added to the downtown. The high-speed rail alignment should be included with the planning for the imminent reconstruction of the highway. To make the alignment work in downtown, the rail needs to be underground in the city of Hartford to preserve the fabric of the city and to cross under the Connecticut River as the alignment continues east. Since the highway will need to be lowered in the near future, it is the perfect opportunity to construct the underground sleeve below the highway trench to house the railway. Combining the planning and construction of these two major projects will produce substantial cost savings for both projects and important time savings for the rail construction. The planned railway realignment would also allow for continued freight service through Hartford into Eastern and Northern New England.

Transportation Strengths and Opportunities Hartford’s Union Station is currently served by Amtrak. Two trains a day provide rail service directly between Hartford and Vermont and between Harford and the existing Northeast corridor from New Haven south.

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Section of the new Union Station area.

With I-84 decked over, there is more room for station area development.

Here, Union Station is connected to HSR, commuter rail/Amtrak, the BRT system, and local bus service. The truly multimodal station has pedestrian and bicycle access as well.

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While there is limited direct service to the Northeast Corridor, Amtrak also operates a shuttle from Springfield, MA, through Hartford to New Haven with a quick transfer to trains on the Northeast Corridor and a companion shuttle from New Haven to connect northbound passengers to Springfield.

The proposed busway loop through downtown Hartford connects to nearly 60,000 jobs and provides access to the HSR at Union Station.

The Hartford region has an extensive commuter-oriented bus network operated by Connecticut Transit, but the region does not have any other modes of public transportation. Downtown Hartford is accessible by more than 12 bus routes. In addition, a free shuttle provides services on a loop in downtown and many highway-oriented business parks are served by commuter buses. Park-and-ride express services also bring suburban workers into downtown, and many malls and major employers are served by buses. These routes serve some riders very well, but the system is not yet mature. Buses run infrequently during the evening and on weekends, and many routes do not run at night or during weekends at all.

The Hartford region does not yet have the culture of public transit or the proven demand for local transit to warrant the immediate construction of a region-wide fixed rail system in the near future. However proposals have been made in the past decade to begin the creation of a more complete transportation network in the region by connecting the areas of high demand to downtown Hartford with the appropriate transportation method.

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The current proposals and plans for increased transportation connectivity within the Hartford region include a Bus Rapid Transit (BRT) network with dedicated busways. In April 2011 Governor Dannel Malloy decided to proceed with construction of the first route in this system, a New Britain – Hartford BRT line, using a dedicated right-of-way for most of its length. Local, state and federal governments studying the possibility of constructing a new commuter rail line between Springfield, MA, and New Haven CT, using the existing Amtrak right-of-way through Hartford.

Getting StAR Right in Hartford Previous sections of this chapter addressed the importance of effective planning at several levels needed to achieve the full economic potential of HSR service in Hartford. The elements that should be encompassed by this plan should include the following:

Foster Centrality As exemplified from case studies of HSR success stories abroad, the location of the station is key to the success of HSR in a city, and the city’s ability to capture economic value that connection to HSR can bring.

The location of HSR entrances in Hartford presents a unique opportunity to reinvest in both the city’s historic downtown district and to capitalize on the economic investment that a new station will bring. In Hartford two

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The historic call of Union Station provides a grand entrance to Hartford’s new multi-modal hub.

Both the existing commuter rail and proposed high-speed service line are accommodated in a new station extension.

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station entrances are proposed, one a connection from the existing Union Station, providing intermodal connections to the local bus and BRT system, and a second entrance in a new Church Street station portal. The placement of these entrances will provide connection from Union Station along the historic restaurant and bar district, to the corporate and retail businesses located along Main Street. In addition, the redevelopment of the Union Station area, to accommodate the new BRT and bicycle facilities, in addition to the redesign of I-84, will provide a connection between the station and the insurance headquarters located to the west, which are currently disconnected from Union Station and Downtown.

The Union Station entrance will be created through an extension on the south side of Union Station. This extension will utilize only the nonhistoric southern wing of the building, which is home to recently vacated offices.

A similar case of economic development along a key corridor and connected to a train station is the 17th Street redevelopment in Denver.

Here livability and walkability were identified as the key goals of redevelopment, with an emphasis placed on maximizing activity on the street level. Like 17th Street, the focus along the pathway from Union Station to Main Street should center on creating a “live� street, spotlighting downtown Hartford as a hub of activity and center of the greater Hartford region.

Locating an HSR station at the corner of Church St and Ann St is the most logical location for the new station to achieve the vision of an eastwest corridor. It may also be possible in the long run to relocate the XL Center to a new entertainment district north of Route 84, as the City of Hartford has proposed. This would remove one of the largest existing barriers to revitalizing the downtown area.

Maximize Regional Connectivity The most important element of preparation for the Hartford region is the intermodal system to connect the entire region to the high-speed rail network. The vision for this intermodal system begins with the plans for the New Britain busway, with a few modifications, the entire BRT network and commuter rail service. The increased connectivity would provide tens of thousands of daily commuters with a one-seat ride to the HSR station, and thus would significantly increase the number of people connected to the Northeast Corridor. Providing the regional connectivity to the HSR station also provides businesses and residents of the entire Northeast Corridor access to the opportunities within the Hartford region.

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Busways The New Britain busway should be designed to make a loop through downtown serving other commuter destinations before stopping at Union Station. Stopping at Union Station first, which would require that the buses loop around the station and pull into angled parking, would be time consuming and would discourage some commuters from using the service.

The PennDesign studio recommends that two elements of the proposed New Britain busway be modified to better serve commuters and to permit maximum flexibility in the design of commuter rail and HSR services in downtown Hartford.

First, the dedicated right-of-way west of downtown should be redesigned to run parallel to the existing rail without impinging on the width of right-of-way necessary to run Amtrak, commuter rail, and HSR in the future. At the downtown Hartford end of the BRT route, the busway should travel through the area now occupied by highway ramps, which are to be removed under the planned I-84 reconstruction. Second, the busway loop through downtown Hartford should be planned to serve to the business district first, then connect to Union Station. This will provide a faster commuter oriented service and encourage riderhip.

Pedestrian Access As discussed previously, downtown Hartford suffers from poor street connectivity linking the district’s isolated employment centers. When I-84 is rebuilt it will be possible to correct this problem with the introduction of a new street grid. It may also be possible to extend pedestrian connections from Union Station east towards Main St if at some point in the future the XL Center is relocated north of Route 84. Pedestrian priority streets and green boulevards would provide additional linkages, reconnecting the cultural and economic assets of downtown Hartford.

A critical mass of pedestrian activity is necessary for two reasons: street life is needed both to revitalize and re-activate the downtown area, as well as to provide connectivity between the HSR station and downtown destinations for residents, workers, and visitors. Steps to improve street life and pedestrian circulation are therefore essential elements of Hartford’s revitalization strategy.

The iQuilt Plan, a pedestrian plan focused on reconnecting the cultural assets in downtown Hartford, is currently entering Phase II. The plan focuses on creating GreenWalk, a one-mile pedestrian priority pathway connecting the Capitol building and the city’s waterfront to the east. With the reconstruction of I-84 and the new HSR station, the iQuilt vision should be expanded to encompass pedestrian linkages to the north, west, and south.

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Station Location A correctly sited and well designed station will serve as the gateway to the city of Hartford for rail passengers. The two entrances to the station provide two gateways into the city, and each provides a different focus for the passenger. Those entering the HSR station from the western entrance of Union Station will be surrounded by some of Hartford’s iconic landmarks, including: historic commercial buildings, Bushnell Park, and the vistas of Connecticut’s 19th century Victorian Capitol Building.

Those entering (or exiting) from the Church Street portal will be surrounded by a modern, revitalized commercial corridor. New economic activity, including shops, restaurants, bars and multi-family housing will demonstrate downtown Hartford’s renewed livability and vitality.

The Union Station area is currently replete with surface parking, shown in dark gray at right. This land is ideal for more intensive uses as the HSR station attracts new businesses and residents.

With the removal of I-84, a new street grid could be introduced. If parking were concentrated in one downtown location, and a tiered pricing structure encouraged parking further from downtown or the use of transit to access the central business district, new infill development, shown in purple at right, could generate economic activity and create a more enjoyable urban environment.

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New Development Union Station

Bushnell Park

Additionally, the extensive areas of surface parking lots throughout downtown Hartford will be removed through infill development, with structured parking provided near the portal to consolidate downtown parking and accommodate drivers.

To integrate the station with the city, and downtown in particular, the exteriors of the entrances will be designed to complement the existing conditions at both sites. The eastern entrance will therefore feature a setback height to complement the historic scale of the existing buildings, and include retail frontage along the first floor to harmonize with the surrounding food and entertainment district.

Incentivize Development The new HSR station would serve as a catalyst for new commercial and residential uses in downtown Hartford. As discussed above, there is an existing latent demand for more rental housing downtown, which the addition of HSR and new economic activity will further bolster. Several new housing towers can be accommodated in the revitalized downtown area.

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The preparations for HSR could allow the city to experience infill development, shown in light blue above, filling in many of the empty lots in the heart of downtown.

SECTION 5: THE METROPOLITAN ROLE

Commercial uses will also be supported by the new HSR access, both at the historic Union Station and the new Church Street portal. The focus of the development will be along the new Union-Main corridor. Existing bars, restaurants, and retail stores along this pathway are commercially successful, and there is evidence of latent demand for more services. As the residential population of downtown Hartford increases, so will the need for additional shops and restaurants.

Commercial growth in downtown Hartford should be located adjoining the existing commercial establishments and corridors. Along the corridor between Union St and Main St, the studio proposes that ground floor space be used for retail purposes, with second floor office and residential uses, often located in historic buildings. New commercial located along Allyn and Pratt Streets should be designed to complement the existing character, as well as adhere to the historic district standards.

Where possible, vacant or underutilized existing buildings with historic character should be rehabilitated, with development incentives provided to encourage adaptive reuse of these structures. The height along this commercial corridor should be kept to a minimum of four stories, to adhere to the district’s existing small scale, charming historic “main street” character.

New commercial buildings located on Elm Street and bordering Bushnell Park, as well as those located closer to Main Street, can and should be larger in scale than those along Pratt and Allyn. Development along Elm provides an opportunity for more modern new development, as there are no historic or appealing buildings that could be rehabilitated.

The vacant parcels and surface parking within downtown Hartford,currently a barrier to redevelopment, should be the focus of infill development. Parking should be consolidated into new, wrapped structured parking garages north of Church Street (providing parking near the secondary entrance to the HSR station, without encumbering the historic Union Station). Hartford should explore a tiered pricing structure to discourage on-street parking in the downtown area,especially along the Union-Main Street corridor. Drivers wishing to park in downtown should be charged a higher fee to park along pedestrian priority streets, and charged less to park farther away from central downtown.

The StAR in Hartford thus takes into account both the city’s historic past, existing cultural assets, and provides incentives for future growth and development.

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Define a Shared Regional Vision The plans for a powerful StAR in the Hartford region requires the cooperation of the city of Hartford, the surrounding suburban subcounties within Hartford County, the State of Connecticut, and the three Metropolitan Planning Organizations in the Hartford area – the Midstate Regional Planning Agency, the Capital Region Council of Governments, and the Central Connecticut Regional Planning Agency. By working together to plan for HSR at the regional level, these entities create the conditions necessary to maximize the economic benefit for the entire metropolitan region.

Conclusion HSR in downtown Hartford can have a transformative effect on the economy, physical environment, and population of the city and the entire region. Located at the heart of a metro region of 1.2 million, with some of the highest per capita income in the county, Hartford is ripe for the investments in creating new centrality with the HSR station, maximizing connectivity with a region-wide intermodal transportation system, incentivizing development, and implementing a regional strategic vision. These investments can prepare the region to for the economic opportunities HSR creates, to help not only the city, but also the entire region, benefit from the substantial increases in connectivity to New York City, Boston, and the northeast megaregion Hartford and the region can be a model for what HSR can do for America’s smaller, intermediate, urban areas and metropolitan regions.

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THE METROPOLITAN ROLE in the NORTHEAST CORRIDOR With such a wide variety of cities in the northeast, and along the proposed HSR line, it is essential that metropolitan areas plan and prepare to maximize the benefits of HSR, taking into account their specific set of characteristics, assets, disadvantages, and current and future needs.

The crucial factors this studio has identified that determine the success of a StAR – centrality, connectivity, appropriate incentives for development, and coordination with a regional plan and strategy – are the ones that metropolitan planning authorities must ensure are present to realize the HSR effect on the local level.

The metropolitan role is crucial to the Northeast’s ability to maximize the potential benefits of HSR, achieve the greatest possible economic growth, and benefit the economy of the entire nation.

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Secretary of Transportation Ray LaHood (L) and Vice President Joe Biden (R) walk to a train at Union Station in Washington, D.C. (2011)

SECTION 6: CHANGING THE CONVERSATION

6. CHANGING THE CONVERSATION

SECTION OVERVIEW This report presents the arguments for why high-speed rail is an essential investment for the future of the Northeast megaregion. High-speed rail responds with efficacy and impact to the questions that will face the Northeast in the coming decades: How to compete, how to grow, and how to get around. Across the world, high-speed rail has proven itself as a tool of great transformative potential. It can serve as the foundation for the Northeast Megaregion’s long-term prosperity, with rippling impacts for the United States as a whole.

One question remains to be addressed: What will persuade the American public to support a 21 st century mobility investment? Just as cars filled this role in the 20th century, high-speed rail is the key element in a balanced transportation system that will allow the economy to flourish in the 21 st century.

Much of America’s success over the past two centuries has resulted from the ability to move people, goods, and ideas quickly and effectively across large distances. This has only been possible through essential investments in transportation infrastructure, which have shaped and transformed this country at all levels. Now, however, many of America’s major 20th century transportation systems are at the end of their useful lives, and their capacity has largely been consumed. The nation’s roads, rails, ports, and airports will require huge new investments to accommodate an expected 120 million additional Americans by 2050. 1 Rail travel has long been a foundation of America’s mobility system. In the mid-20th century, vast expansions were made in interstate highways and regional and international airports, but major further expansions are no longer physically nor fiscally possible. It is time to re-engage the capacity of the railroads that have served America in the past and turn them into an asset for the future. High-speed rail is an effective tool for increasing capacity because it can reuse existing rights-of-way, engage new tunneling technologies, and minimize the need for land acquisition.

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High-speed rail caters to new generations of Americans. In the 1950s, being behind the wheel of a car was part of the American dream. But, this dream is changing. The next generation of Americans chooses to live in neighborhoods that are denser, more urban, and more walkable – and also more effectively served by regional transit and intercity rail than by the private car. As gas prices rise, the choice to ride transit is becoming more attractive. Fundamental changes are also underway in the nation’s economic geography. The knowledge economy has introduced new ways to communicate remotely through technology, but it has also brought a growing need for face-to-face interaction. In both the United States and the rest of the world, megaregions, stretching from 200 to 800 miles in length and linking metropolitan economies, are becoming the new building blocks of the economy.

High-speed rail is well-suited to meet the mobility needs of this new economic geography. HSR can fill a unique role in a balanced transportation system, taking its place alongside roads, runways, and conventional rail to serve the nation’s 21 st century mobility needs. It is a particularly good match with the Northeast’s network of dense metropolitan regions and its knowledge economy industries.

Still, in a time of intense pressure to cut government spending, gaining public and political support for high-speed rail is a difficult challenge.

Many Americans do not put enough emphasis on infrastructure investment, nor do they realize the magnitude to which infrastructure systems must be maintained. America’s infrastructure system is failing, but few are noticing. This problem will only grow more acute over time and will hinder the growth of the Northeast and other megaregions if it is not solved.

In the midst of this context, misconceptions about high-speed rail dominate the public discourse. The objective of this report is to shift this discourse and to demonstrate the impact of high-speed rail, as well as its imperative, on both a national and personal scale. This is a change in the public conversation that will make the benefits of high-speed rail accessible and relatable to a wide audience. It is part of a larger conversation that Americans must have about investing in their future.

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DISPELLING MYTHS, INSERTING FACTS Borrowed from Spain’s RENFE advertisements: A potential marketing vision for HSR in America. 2

“The free market should determine the best way for people to travel.”

Although most Americans travel in private automobiles or with private air carriers, and most of their goods are moved by trucks or on private rail systems, America’s transportation system is largely the product of federal policy, investment, and incentives. The framers of the Constitution included the Interstate Commerce clause to explicitly create a federal role in promoting the infrastructure the nation would need to grow and prosper. From its earliest days, the federal government has subsidized the capital costs of virtually all transportation infrastructure, from the construction of canals in the 18 th century, to the 19 th-century transcontinental railroad and the national rail system, to the 20 th century interstate highway and aviation systems. Until recently, infrastructure spending enjoyed bipartisan support, and today most Republicans and Democrats can still agree that the federal government has a fundamental role to provide the infrastructure that keeps the economy going.

The federal government’s largest single subsidy for any infrastructure system has been the creation of the national Interstate Highway System.

The benefits this system has had on our economy have been huge, enabling a five-fold increase in Gross Domestic Product over the past half century. Still, without such massive government intervention in the success of the automobile and aviation, the modal balance may have been very different. Subsidies for air and roads represent 79 percent of USDOT’s fiscal year 2010 budget. 3 Investing in high-speed rail would give consumers something approaching a free-market decision of how to travel. 4

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“We need jobs, not high-speed rail.”

A recent report presented to the American Public Transportation Association suggests that for public transportation projects, for every billion dollars of project cost, 36,108 jobs are created. 5 While this figure is for public transportation instead of high-speed rail specifically, it still represents the staggering potential of this $100-billion, doubledecade project to create both short and long-term jobs in construction, engineering, and operations. There is also substantial potential to strengthen the country’s manufacturing base with orders for rolling stock, tracks, signals, and a slew of other system components. In anticipation of a high-speed rail network in the Midwest, the Spanish train manufacturer Talgo opened a plant in Milwaukee, Wisconsin that employed 125 workers at the outset. However, when Wisconsin Governor Scott Walker cancelled the state’s high-speed, Talgo was forced to close the plant.

Construction workers in HSR train tunnel construction. 6

“We need to rein in our federal deficit before taking on new infrastructure project.”

The strength of the economy depends on the ability to get from point A to point B reliably. Without investment in transportation, the mobility and access needed to support economic growth will not be available.

In the short-term, high-speed rail offers a unique opportunity to invest in transportation that can meet capacity demands at lower costs while creating tens of thousands of jobs. In the long-term, an investment in HSR will be self-supporting as it simultaneously creates new economic activity and expands the federal tax base. Section Four: Financial Viability explains that HSR in the Northeast Corridor can be built using a portion of public and private financing tools that will limit the impact on the federal deficit.

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Opposite page from top to bottom: High-speed rail in Spain, France, The Netherlands, UK and Russia. 7

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“Sure, there is high-speed rail in other countries, but just because they have it in France, China, and Japan (and Turkey, Taiwan, Korea, Italy, Spain, the UK, Netherlands, Germany, Belgium, Switzerland, and Russia) doesn’t mean we need it here. This is America. We do things differently.”

Doing things differently is exactly why America should build high-speed rail. Building high-speed rail after other countries have already done so allows us to learn from both the successes and from the mistakes these countries have made, while capitalizing on American ingenuity to advance technology and catalyze broad and positive results. America and the Northeast Corridor in particular can lead the world in using high-speed rail to balance and optimize the capacity of all modes of metropolitan, regional, and inter-city transportation.

Technological innovations only recently being explored in other countries, such as more efficient traction power, regenerative breaking, advanced signaling that allows for shorter headways, and other general system improvements, could be improved and tailored for the US. Additionally, the American affinity for smart technology could expand to customer booking technologies allowing travelers to select their train by time or price on smart phones and other mobile devices.

“Why should I care? What’s in it for me? I will never ride the train.”

There is inherent value in options: This has been termed the option value.

There will be people who ride HSR trains on a daily or weekly basis, and there will be people who never will. But if one needs to get home fast or travel to a meeting in a snowstorm, the current options are slim.

HSR opens doors to everyday travel and occasional necessity. Even those Northeasterners who never use the train will benefit from the multitude of positive effects described elsewhere in this report, including lowered emissions, economic gains, fewer car crashes, less wasted fuel, and a more robust transportation network.

“We are a car country. We will never change.”

The United States is a car country, but it was not the first to make the car. America made it better, took it to a bigger market, and reshaped the nation. America did not invent high-speed rail either, but could manufacture and master the science such that, once again, the world might even forget that America was not first.

Some have suggested that high-speed rail will in some way threaten Americans’ love affair with their automobiles. Nothing could be further from the truth. Cars will always be used for some local trips within metropolitan areas. High-speed rail, however, will improve mobility for trips between cities and metropolitan regions, and will free up some capacity on the Northeast megaregion’s already congested inter-city highways.

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High-speed rail will enable America to prolong the useful life of roads and runways and build a comprehensive transportation network that increases mobility.

One of the first American cars circa 1896. 9

“I want the freedom to move and the automobile is the best way to live my life unscripted. I don’t want to rely on a timetable to be the master of my fate.”

Freedom to move and choice in how to move is part of the American dream. However, growing congestion on the roads, rails and runways across the Northeast now restricts the freedom of movement of everyone living in the megaregion. Today’s freedom of choice to travel by car may require spending hours sitting in traffic on I-95 or another congested highway.

American assembly Line circa 1913. 10

By comparison, HSR will open up a whole new range of choices in intercity travel across the Northeast. Having high speed trains leaving every 10 minutes from every major center in the megaregion will drastically transform the range of travel options for millions of Northeasterners. In an automobile, the only certainty is time of departure. With high-speed trains capable of operating at 99 percent reliability, travelers will once again have control over their time of arrival. During the busiest times, snowstorms, or emergencies, high-speed rail will be the most dependable mode available.

“Why would we ever subsidize a project of this scale when Bolt Bus and Megabus are accomplishing the needs of inter-city travel? Can’t we just dedicate a highway lane to mid-distance buses?”

The new generation of inter-city buses fills an important gap in the Northeast’s mobility system. As the demand for inter-city travel increases, the mid-distance buses will continue to cater to travelers not dependent on guaranteed arrival times or improved amenities.

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I-95 during 2010 snowstorm (left), 11 Chinese bullet train operating during a record snowstorm (right). 12

SECTION 6: CHANGING THE CONVERSATION

Bolt Bus in Lincoln Tunnel traffic. 13

However, these buses are subject to growing traffic delays on the Northeast’s congested highways, and for this reason are not suitable for business and leisure travelers who require reliability or greater comfort in their travel arrangements.

A recent magazine article extols the virtues of Megabus and Bolt Bus services because “the bus simply uses existing roads, requiring no policy debates, government funding, or land management studies.” As discussed earlier, there is nothing free about the highways. Additionally, the buses intentionally park near rail stations to use intermodal connections, benefiting from the public investment but not paying for the convenience. 14

“We have energy resources in our own backyard.”

The last seven presidents have all made commitments to making America more independent of foreign oil. The country can choose to pursue this goal through tapping into limited reserves at home, with inherent risks, or by investing in HSR and other non-petroleum-dependent modes to move toward energy independence.

During the Cold War, the Interstate Highway System was built as a “National Defense Highway System,” to provide mobility in case of attack from the Soviet Union. Many commentators, including Paul Weyrich and William Lind, have argued that rail transit is a necessary response to the present national security threat: Over-reliance on imported petroleum.

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2010 BP Gulf Oil Spill. 15

Operating on electric power, high-speed rail allows America to capitalize on the growth of renewable energy in its own backyard — clean, domestically produced energy that leads to energy independence. By reducing dependence on foreign oil, investment in HSR is a crucial step toward investment in a future built around alternative energy and not beholden to the whims of OPEC or other major oil exporters — an increasingly urgent need in a time of spiraling gas prices.

Additionally, HSR offers the opportunity to capitalize on US-based energy resources safely. With increased renewable standards in the Northeast states, NECSA could have the option to purchase power directly from renewable energy providers.

Japanese HSR station with solar panels for local power (left). 16 Germany’s use of train lines as part of the national power grid (right). 17

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HIGH-SPEED RAIL and YOU While much of the discussion about the benefits of high-speed rail focus on its implications for the economy and cities, the most important impacts will be on the lives and livelihoods of HSR passengers. These benefits can include shorter, more reliable travel times, fewer overnight stays, more time with families, a cleaner environment, and higher incomes.

International HSR networks have succeeded in getting this message across by reaching out to specific market segments through messaging and advertising. It is now time to tell the HSR story to the American people in a way that appeals to them in terms of their own lives.

Families: HSR Puts People First HSR will save travelers in the Northeast estimated 60 million hours a year.

This means more time with parents, being able to be home in time to say goodnight to children, more soccer games, and getting to see the one you love in an otherwise busy world.

Taiwan’s HSR campaign: Be There that speaks to time with others. 18

Environmentalists Due to the environmental benefits discussed in this report’s benefit-cost analysis, HSR should be very appealing to anyone concerned with the environment.

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Spain’s RENFE campaign. “The best way to protect nature is by imitation. The duckbill nose design makes the train 30 percent more energy-efficient.” 19

To celebrate 25 years of service, SNCF launched an ad campaign “take the time to go fast,” touting the fact that choosing to ride the TGV means choosing the environment. Television commercials depict travelers flying through pastures to their destination with the implicit message that “TGV preserves wildlife.”

Business Travelers: Time is Money For those that will find real appeal in the time savings HSR offers, SNCF has promoted the benefits by advertising first class services, airport access, and the ability to catch a train every five minutes. For business travelers, reliable, fast service is of the utmost importance.

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France’s SNCF campaigns: “A TGV every 30 minutes” (left)and “A taste of first class experience at half the price” (right). 20

SECTION 6: CHANGING THE CONVERSATION

To attract business travelers, it is important to convey how HSR can simplify their lives. In the United States, particularly within the Northeast corridor, the market segment of business travel is largely established by the current Acela service. True high-speed service can offer riders a new level of confidence in business travel and riders can expect membership perks similar to those offered by the airlines.

France’s SNCF campaign: “Try it Once and Forget the Road” 21

Tourists and Leisure Travelers HSR will make casual travel in the Northeast a much more pleasant experience for tourists and leisure travelers. Shorter egress and access times, no onerous airport security, and a comfortable ride amount to an entire new way to travel that surpasses everyday expectations.

Elected Officials One of the best ways to get politicians “on board” is to encourage them to literally get on board. Shortly after his visit to China to explore the Chinese network, Governor Schwarzenegger put his support of California HSR in a new light: he understood the ability of the service to foster economic growth.

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Media Outlets HSR leaders can help inform media outlets of benefits by meeting with local leaders and writing op-eds for major news outlets. As the British HSR advocacy group GreenGauge 21 did, HSR advocates in the Northeast should start by working with smaller, local media outlets who can articulate local issues and therefore publicize the more personal benefits an HSR system can bring.

Real Estate Developers Real estate developers can benefit from HSR and should therefore play a part in advocacy campaigns that support these investments. Center city stations will provide important benefits to the owners and developers of nearby properties. The highest property values in cities around the world can be found in locations near important transportation hubs. These locations are also able to withstand economic downturns.

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Russian red, white, and blue paint a picture of American High-speed Rail reality. 22

SECTION 6: CHANGING THE CONVERSATION

CONCLUSION In a time of unprecedented partisan politics, rising fuel prices, and economic uncertainty, high-speed rail may seem like a low priority.

But with every crisis comes opportunity. This report begins by expanding upon the idea of reinvigorating our freedom to move.

High-speed rail is the innovative investment that will bring balance to our transportation system, accommodate growth, and secure our future economic prosperity.

The proposed public benefit corporation, NECSA, will foster interstate commerce using a 21 st century model. The financial proposal augments institutional innovation by recommending a realistic means of project finance. By leveraging operating profits, high-speed rail can involve the private sector and pay for much, though not all, of the upfront capital investment either through public financing mechanisms or through a series of long-term concessions.

High-speed rail creates the economic conditions within cities and metropolitan regions that can lead to station area regeneration and region-wide economic growth. If cities and regions properly prepare for high-speed rail they can maximize the benefits. Highspeed rail in the Northeast Corridor has the potential to create jobs nationwide, capitalize on an existing critical mass of economic activity, provide capacity for a growing region, and foster economic connections that would benefit the entire country.

The highest cost would be the cost of doing nothing.

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REFERENCES AND CITATIONS inside cover: {St. Pancras Station] http://www.flickr.com/photos/jkr1812/2451593622/sizes/o/in/ photostream/

Executive Summary Cover Image: [Javelin train in snow] http://www.flickr.com/photos/mark_milham/4260288870/sizes/o/ in/photostream/.

Section 1: Vision Cover Image: [ICE Train leaving Amsterdam] http://www.shutterstock.com/pic-18181792.

1.

Ronderos, Nicolas L.(2009) “Spatial strategies for U.S. Economic Development” in America 2050: New Strategies for Regional Economic Development, eds. Petra Todorovich and Yoav Hagler. Lincoln Institue of Land Policy and Regional Plan Association. NY, New York City.

2. U.S. Bureau of Economic Analysis. National Economic Accounts. Gross Domestic Product 2010.

3. Ronderos, Nicolas L.(2009) “Spatial strategies for U.S. Economic Development” in America 2050: New Strategies for Regional Economic Development, eds. Petra Todorovich and Yoav Hagler. Lincoln Institue of Land Policy and Regional Plan Association. NY, New York City.

4. Rendering Credit: [Transbay Transit], Retrieved May 13, 2011 from, http://www.igreenspot.com/ transbay-transit-center-funicular-extravaganza-rendering/.

5. 2010 Penn Studio Proposed System Design.

6. 2010 Penn Studio Right-of-way breakdown “donut” Pie Chart 7. [German ICE train] http://www.flickr.com/photos/matthewblack/2558731895/

Section 2: The HSR Effect 1. [Flight taking off from JFK Airport] Retrieved May 13, 2011 from http://jetphotos.net/showphotos. php?category=4&go=View 2. Vukan R Vuchic, Transportation for Livable Cities, (New Brunswick, NJ: Center for Urban Policy Research Press, 1999), 88.

3. Resource Systems Group, Inc, Innovative Approaches to Addressing Aviation Capacity Issues in Coastal Mega-regions, Airport Cooperative Research Program 31 (Washington, DC: TRB, 2010), 26.

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4. INRIX Urban Mobility Report 2010 and Airport Cooperative Research Program Report 31.

5. Resource Systems Group, Inc, Innovative Approaches to Addressing Aviation Capacity Issues in

Coastal Mega-regions, Airport Cooperative Research Program 31 (TRB, 2010), 26 6. Federal Railroad Administration, High-Speed Ground Transportation for America (Washington,

DC: US Department of Transportation, 1997), 2-2.

7. Resource Systems Group, Inc, Innovative Approaches to Addressing Aviation Capacity Issues in

Coastal Mega-regions, Airport Cooperative Research Program 31 (Washington, DC: TRB, 2010), 6 8. Jeffrey M. Zupan, Richard E. Barone and Matthew H. Lee, “Executive Summary” in Upgrading

to World Class: The Future of the New York Region’s Airports (New York: Regional Plan

Association, 2011) 11.

9. [JFK International Airport Runway] Retrieved May 13, 2011 from http://jetphotos.net/

showphotos.php?category=4&go=View 10. [Denver International Airport] Retrieved May 13, 2011 from http://jetphotos.net/showphotos.

php?category=4&go=View 11. INRIX, “Ranking the Most Congested Cities and Worst Traffic Bottlenecks,” National Traffic

Scorecard, accessed May 5, 2011, last modified 2011, http://scorecard.inrix.com/scorecard/

default.asp.

12. Photo: I-95 in the Bronx. http://upload.wikimedia.org/wikipedia/commons/a/a3/BQE6047.JPG 13. ibid.

14. Map: Congested highways along the NEC – 2010 Studio Report, p. 14 15. Amtrak, A Vision for High-Speed Rail in the Northeast Corridor (Washington, DC: Amtrak, September 2010), 6.

16. ibid.

17. US Department of Transportation, Fiscal Year 2010 Budget Highlights (Washington, DC: US DOT, May 2009) 1.

18. [St. Pancras retail] http://www.flickr.com/photos/clareandjimbob/2676246165/sizes/l/in/ photostream/ 213

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19. “The Eddington Transport Study”. UK Department for Transport. Archived from the original on 03.24.2011. Retrieved 03.17.2011. http://webarchive.nationalarchives.gov.uk/+/http://www.dft. gov.uk/about/strategy/transportstrategy/eddingtonstudy/ 20. Former Chair of the Pennsylvania High Speed Intercity Rail Passenger Commission. Railway Age Magazine in 1992. Retrieved March 17, 2011. http://www.railwayage.com/ 21. U.S. Bureau of Economic Analysis. National Economic Accounts. Gross Domestic Product 2010.

22. Omega Centre. Project Profile UK Channel Tunnel Rail Link. London: University College London Bartlett School of Planning, 2008.

23. Petra Todorovich and Sharath Vallabhajosyula, Eds., Northeast Megaregion 2050: A Common Future, Regional Plan Association: November 2007.

24. ibid.

25. Weisbrod, Glen, Donald Vary, and George Treyz. (2001). Economic Implications of Congestion, National Cooperative Highway Research Program Report 463, Transportation Research Board, Washington, DC. Retrieved 03.17.2011. http://onlinepubs.trb.org/Onlinepubs/nchrp/nchrp_ rpt_463-a.pdf 26. Puga, D. (2002): ì“European regional policies in light of recent location theoriesî”, Journal of Economic Geography, vol. 2, pp. 373-406.

27. GreenGauge21 (2010). High-Speed Rail in Britain: Consequences for Employment and Economic Growth.” [KPMG Study commissioned by Greenguage 21] Retrieved 03.17.2011. http://www. greengauge21.net/publications/consequences-for-employment-and-economic-growth/

[UK business travlers] http://elpc.org/wp-content/uploads/2008/06/PassengersBoardingTrain.jpg

28. Ureña, J.M.de and Coronado J.M. (2009) Changing territorial implications of High Speed Rail in Spain: from individual lines, stations and services to networks” University of Castilla La Mancha, Spain.

Retrieved 03.17.2011. www.cityfutures2009.com/PDF/32_Urena_JoseMaria.pdf 29. Bellet, Carmen (2009) The introduction of the high speed rail and urban restructuring: the case of Spain. University of Lleida. Spain. Retrieved 03.17.2011. www.cityfutures2009.com/PDF/32_Bellet_ Carmen.pdf 30. Zaragoza Case Study. Retrieved May 12, 2011 from http://www.milladigital.org/ingles/10_Gestion.

[Zaragoza development photo] courtesy of Meg Merritt.

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31. Ahlfeldt, Gabriel M. and Feddersen, Arne (2010). From Periphery to Core: Economic Adjustments to High-Speed Rail in Munich Perseonal RePEc Archive. Paper No. 25106. Retrieved 03.17.2011. http:// mpra.ub.uni-muenchen.de/25106/ 32. ibid.

33. Ahlfeldt, Gabriel M. and Feddersen, Arne (2010). From Periphery to Core: Economic Adjustments to High-Speed Rail in Munich Perseonal RePEc Archive. Paper No. 25106. Retrieved 03.17.2011. http:// mpra.ub.uni-muenchen.de/25106/ 34. [Image of Montabaur], Retrieved 9 May 2011 from http://www.absoluteastronomy.com/topics/ Montabaur 35. PennDesign Studio Team 2011 analysis.

36. Bilbao Metropoli-30 (2010) Bilbao 2010: The Strategy. Retrieved 05.10.11. http://www.bm30.es/ plan/Bilbao2010-TheStrategy.pdf 37. Bilbao. Strategic Diagnosis and Options for the Future. Presentation to Penn 2011 Studio. 9 March 2011.

Section 3: Institutional Innovation [front cover image] http://farm5.static.flickr.com/4154/5200858243_0880fd3d46_z.jpg 1. [Amtrak map] http://www.crd.de/pics/images/amtrakstreckennetz960px-1-1.gif 2. [Coupled Trains] Flickr user kuemmi: http://farm2.static.flickr.com/1233/577905054_88b83f8502_o. jpg 3. [Javelin train] http://farm2.static.flickr.com/1250/5165258016_ab43beaf18.jpg 4. [HS1 logo] http://www.hs1archive.co.uk/images/hs1_logo.gif

[HS2 Logo] http://www.tonybaldry.co.uk/wp-content/uploads/2011/03/hs2-logo1.jpg

5. [Javelin train Olympics] http://group160.org/group160/wp-content/uploads/2008/12/javelin2.jpg 6. [Deutsche Bahn train] http://static.businessreviewonline.com/brnewsitesimagesrootfilepath/File_ root/Article/florida_highspeed_train_project_may_receive_210_million_japanese_fund_101209/ fol-high-train.jpg 215

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

7. [RENFE Trains] http://img.circulaseguro.com/2009/03/ave-renfe.jpg 8. [Deval Patrick (MA, D)] http://politics.ofwnow.com/wp-content/uploads/2010/11/deval-patrick.jpg

[Lincoln Chafee (RI, I)] http://www.cvillepublicmedia.org/images/chafee.jpg

[Dan Malloy (CT, D)] http://www.newstimes.com/mediaManager/?controllerName=image&action=g et&id=502956&width=628&height=471

[Andrew Cuomo (NY, D)] http://www.digitaltrends.com/wp-content/uploads/2009/11/cuomoandrew-big-231x300.jpg

[Chris Christie (NJ, R)] http://www.capemaycountyherald.com/files/imagecache/dpcArticleDetail/ gov_christie_3.jpg

[Tom Corbett (PA, R)] http://media.trb.com/media/thumbnails/story/2010-05/53811384-18191027. jpg

[Jack Markell (DE, D)] http://4.bp.blogspot.com/_sihi42tBsOo/SeyIqvFP8DI/AAAAAAAAADs/ MasInGQ7cEw/s400/markell+_image.jpg

[Martin O’malley (MD, D)] http://www.thenewnewinternet.com/wp-content/uploads/2010/07/ martin.jpg

[Vincent C. Gray (DC, D)] http://dcist.com/attachments/dcist_kyle/09_2010_Vincent_Gray-61.jpg

9. [NEC ownership] http://www.apg-cssc.com/_media/client/pdf/Amtrak_CSSC_ Presentation_10-20-2010.pdf 10. [Virgin trains execs] http://www.my-hospitality.com/wp-content/uploads/2010/07/virgin-trainswith-chris-brown.jpg 11. [US DOT logo] http://www.tisec.com/SI/DEV/admin/data/upimages/US_DOT_logo.png 12. [Amtrak logo] http://www.albany.org/Images/AmtrakLogo-2.jpg 13. [Amtrak conductor] http://www.flickr.com/photos/varocker07/436130202/ 14. Wyckoff, P. L. (2009). Mass Transit Tunnel Project Access to the Region’s Core, Information Kit. Extracted from www. Arctunnel.com 216

REFERENCES and CITATIONS

15. [Federal Railroad Administration logo] http://blog.fieldid.com/wp-content/uploads/fra-federalrailroad-administration-project_logo_fra-inspection-software.png 16. EPA (2011). National Environmental Policy Act (NEPA) Compliance and Enforcement. Extracted from www.epa.gov 17. [Moynihan Station] http://dc.streetsblog.org/wp-content/uploads/2010/02/moynihan_articlebox. jpg

[Boston Silver Line] http://reference.findtarget.com/search/Silver%20Line%20%28MBTA%29

18. Michaelson, J. (2007). Moynihan Station Project Timeline. Extracted from www.moynihanstation.org 19. Washington Group International, Inc. And Wilbur Smith Associates (2007). Silver Line Waterfront Bus Rapid Transit (BRT) Project 2007 Evaluation. FTA and USDOT. 20. Amtrak (2009). An Interim Assessment of Achieving Improved Trip Times on the Northeast Corridor.

Extracted from www.amtrak.com 21. EPA (2011). National Environmental Policy Act (NEPA) Compliance and Enforcement. Extracted from www.epa.gov 22. [New Haven train platform] http://www.nytimes.com/2008/01/24/realestate/24comm.html 23. [Zaragoza development] photo courtesy of Meg Merritt.

24. [Civic engagement] http://bloximages.chicago2.vip.townnews.com/hanfordsentinel.com/ content/tncms/assets/editorial/8/4a/39b/84a39b7f-0527-5816-9bdf-e011cb0aac8crevisions/4d506f9fe7498.image.jpg 25. Mendes, D. (2011) Conversation on expediting the EIS. Philadelphia, PA. 26. [TGV track signaling] http://www.flickr.com/photos/mark_vogel/2872761813/ 27. Amtrak (2009). An Interim Assessment of Achieving Improved Trip Times on the Northeast Corridor.

Extracted from www.amtrak.com 28. Commuter Rail Collision Avoidance Report. Extracted from http://www.cpuc.ca.gov 29. Federal Register (2006). Federal Railroad Administration, Locomotive Crashworthiness. Vol. 71, No 124. Rules and Regulations.

217

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

30. [River Line] http://www.ebbc2.ebbc.org/rail/river_line.jpg 31. [Transportation ROW] http://epg.modot.org/files/thumb/8/8a/643.4.2.jpg/275px-643.4.2.jpg 32. Mendes, D. (2011) Conversation on expediting the EIS. Philadelphia, PA [back cover image] http://www.flickr.com/photos/87833330@N00/4831946748/sizes/l/in/photostream/

Section 4: Financial Viability Section [front cover image] http://www.flickr.com/photos/johnathaneric/3814962390/sizes/o/in/photostream/ 1. Henrik Lindemann, Acting Director, German Transportation Policy, Deutsche Bahn AG, Interview, March 4, 2011.

2. Hong, Victoria, email message, March 14, 2011.\ 3. Mofair, “Energierückgewinnung beim Bremsen: DB AG bremst Vorteil des elektrischen Verkehrs aus,” Eisenbahn-Revue International, March 2011.

4. Lyons, Robert (GATX), email message, March 28, 2011.

5. Shallow, Mike, (Union Pacific Fiber Optics), telephone call, March 31, 2011 6. ibid.

7. Justin, David (Sunoco Logistics LLC), email message, March 28, 2011.

8. Shallow, Mike, (Union Pacific Fiber Optics), telephone call, March 31, 2011 9.

Heftman, Jeffrey M, “Railroad Right-of-Way Easements, Utility Apportionments, and Shifting Technological Realities,” April 22, 2003, Univ of Illinois Law Review Vol. 2002 No. 5, pp 1401-1426.

10. [Taiwan HSR] http://www.travelinlocal.com/high-speed-rail-line-is-coming-to-california/ 11. Heftman, Jeffrey M, “Railroad Right-of-Way Easements, Utility Apportionments, and Shifting Technological Realities,” April 22, 2003, Univ of Illinois Law Review Vol. 2002 No. 5, pp 1401-1426.

12. Brotherhood of Locomotive Engineers, “Amtrak Grants Right-of-Way to Build Fiber Network,” January 11, 2011, accessed April 5, 2011, http://www.ble-t.org/pr/archive/headline011101d.html.

218

REFERENCES and CITATIONS

13. “Cell phone towers,” AirWave Management LLC, accessed March 31, 2011, www.cell-phone-towers. com/cell-sites.html.

14. Likosky, Michael. “Obama’s Bank: Financing a Durable New Deal,” New York: Cambridge University, 2010.

15. “About the EIB,” European Investment Bank, accessed February 27, 2011, http://www.eib.org/about/ index.htm.

16. Rudick, Roger, “A National Infrastructure Bank: Can the U.S. Learn From Europe?” DC Streetsblog, October 8, 2008.

17. Sacchi-Cremme, Daniela, “The European Investment Bank: 50 years of funding sustainable growth,” The European Business Review, 2008.

18. ibid.

19. Sacchi-Cremme, Daniela, “The European Investment Bank: 50 years of funding sustainable growth,” The European Business Review, 2008.

20. ibid.

21. Weber, Joseph, “Obama to propose $50B in infrastructure projects,” Washington Times, Sept 6, 2010.

22. “John Kerry – United States Senator for Massachusetts,” accessed March 28, 2011, http://kerry. senate.gov/.

23. Leavey, Pamela, “Bi-Partisan Kerry, Hutchison, Warner BUILD Act Creates Jobs, Strengthens Competitiveness,” The Democratic Daily, March 15, 2011 24. Seltzer, David, “Using a new tax credit program for transportation infrastructure,” Proceedings of the Forum on Funding and Financing Solutions for Surface Transportation in the Coming Decade, Feb 02, 2011, http://www.transportation-finance.org/pdf/featured_documents/sep_30_report_ final_2011_02_02.pdf.

25. FHWA Office of Innovative Program Delivery: TIFIA, accessed April 28, 2011, http://www.fhwa.dot. gov/ipd/tifia/.

26. [Texas Turnpike] http://www.fhwa.dot.gov/publications/publicroads/06jan/images/cap6.jpg 27. Lyons, Robert (GATX), email message, March 28, 2011.

219

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

28. [Electric Windmills] http://4.bp.blogspot.com/_cbrituclP6w/TQbGeMMsXmI/AAAAAAAAALM/i_ Mmb3_2GlM/s1600/18windpark1.jpg 29. Lyons, Robert (GATX), email message, March 28, 2011.

30. US Dept of Transportation, “Report to Congress on Public-Private Partnerships,” Dec 2004, http:// www.fhwa.dot.gov/reports/pppdec2004/.

31. GAO, “Highway Public-Private Partnerships More Rigorous Up-front Analysis Could Better Secure Potential Benefits and Protect the Public Interest,” United States Government Accountability Office, Report to Congressional Requesters. Feb 2008, accessed Feb 2011, http://www.gao.gov/new.items/ d0844.pdf.

32. US Dept of Transportation, “Report to Congress on Public-Private Partnerships,” Dec 2004.

33. ibid.

34. GAO, “Public-Private Partnerships: Terms Related to Building and Facility Partnerships,” GAO/GDD-9971, April 1999, http://www.gao.gov/special/pubs/Gg99071.pdf.

35. US Dept of Transportation, “Report to Congress on Public-Private Partnerships,” Dec 2004.

36. ibid.

37. GAO, “Public-Private Partnerships: Terms Related to Building and Facility Partnerships,” GAO/GDD-9971, April 1999, http://www.gao.gov/special/pubs/Gg99071.pdf.

38. McLean, Bethany, “Cities for Sale: Psst! Wanna buy the New Jersey Turnpike?” March 15, 2011, http:// www.slate.com.

39. US Dept of Transportation, “Report to Congress on Public-Private Partnerships,” Dec 2004.

40. Kelleher, Ellen, “Pensions bypass funds as direct investment grows,” Financial Times, Jan 9, 2011, accessed April 20, 2011, http://www.ft.com.

41. Johnson, Steve, “Bank infrastructure funds struggle to raise money,” Financial Times, April 10, 2011, accessed April 20, 2011, http://www.ft.com.

42. Kelleher, Ellen, “Pensions bypass funds as direct investment grows,” Financial Times, Jan 9, 2011, accessed April 20, 2011, http://www.ft.com.

43. Johnson, Steve, “Bank infrastructure funds struggle to raise money,” Financial Times, April 10, 2011, accessed April 20, 2011, http://www.ft.com.

220

REFERENCES and CITATIONS

44. Kelleher, Ellen, “Pensions bypass funds as direct investment grows,” Financial Times, Jan 9, 2011, accessed April 20, 2011, http://www.ft.com.

45. “REITs and Infrastructure: The Next Investment Frontier?” Deloitte White Paper, April 2010, accessed Feb 2011, http://www.deloitte.com/view/en_XA/xa/services/public-private-partnerships-forinfrastructure/index.htm.

46. “National Real Estate Investor - Commercial Real Estate News Analysis of Finance, Investment, Development and Management,” Global Real Estate Monitor, accessed April 17, 2011, http:// nreionline.com/globalrealestate/dec09_article2.html.

47. “Sitting on our Assets: Rehabilitating and Improving our Nation’s Rail Infrastructure,” Transportation and Infrastructure Committee Hearing, Feb 17, 2011.

48. [JP Morgan Chase] http://images.businessweek.com/ss/09/05/0519_ideal_undergrad_ employers/20.htm

Section 5: The Metropolitan Role 1. Cover Image: Victoria Harris (2009) 2. Image credit: 30th Street Station, PhiladelphiaPhoto available via flickr user “afagen”. Available at: http://www.flickr.com/photos/afagen/4745554460/sizes/l/in/photostream/ 3. Image credit: Boston Waterfront Photo available via flickr user “peebot” http://www.flickr.com/ photos/peebot/2599093051/sizes/l/in/photostream/Image 4. Photo Credit: Downtown Hartford Connecticut, Photo courtesy of Jonas Maciunas, City of Hartford 5. [Philadelphia Suburban House] Retrieved May 13, 2011 from flickr user “timengleman”. Available at http://www.flickr.com/photos/timengleman/3762308948/sizes/l/in/photostream/ 6. [Lille Station, France] Retrieved May 13, 2011 from flickr user “.Dange” Available at http://www. flickr.com/photos/87912379@N00/125833995/sizes/z/in/photostream/ 7. [Nagoya Station, Japan], Retrieved May 13, 2011 from flickr user “ ilyaericlee”. Available at http:// www.flickr.com/photos/ilyaericlee/2603351232/sizes/l/in/photostream/ 8. [Downtown Philadelphia], Photograph, Victoria Harris (2009) 9. [Downtown Hartford], Photograph, Anjuli Maniam (2011) 10. Peters, Deike. Rail City Berlin: Rail Infrastructure Development and Intermodality in the Reunified German Capital, Washington, D.C, Transportation Research Record, 2010. Print. 66 11. Levy, Paul, President & CEO, Center City District. (2011, February 14). Personal interview. page 18 221

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

12. Levy, Paul, President & CEO, Center City District. (2011, February 14). Personal interview. page 18 13. San Francisco Planning + Urban Research Association. Beyond the Tracks. 2010. 11.

14. San Francisco Planning + Urban Research Association. Beyond the Tracks. 2010. 11.

15. Levy, Paul, President & CEO, Center City District. (2011, February 14)Personal interview.

16. Bureau of Economic Analysis. www.bea.gov Accessed February 13, 2011.

17. Longitudinal Employment-Household Dynamics, US Census. www.lehdmap.did.census.gov Accessed March 1, 2011.

18. Longitudinal Employment-Household Dynamics, US Census. www.lehdmap.did.census.gov Accessed March 1, 2011.

19. iQuilt. http://theiquiltplan.org/home/ Accessed May 1, 2011.

Section 6: Changing the Conversation [cover image]: http://msnbcmedia.msn.com/i/MSNBC/Components/Photo/_new/pb-110208-bidenamtrak-jm.jpg 1. U.S. Census Bureau, Population Projections. Washington, D.C. http://www.census.gov/population/ www/projections/usinterimproj/ 2. [RENFE Eagle Ad]: http://adsoftheworld.com/media/print/renfe_eagle 3. USDOT FY 2010 budget http://www.dot.gov/budget/2010/bib2010.pdf 4. Weyrich, Paul M., and William S. Lind. Moving Minds: Conservatives and Public Transportation.

Alexandria, VA: Free Congress Foundation, 2009. Print. 142.

5. Weisbrod, Glen and Reno, Arlee. 2009. Economic Impact of Public Transportation Investment.

6. [Tunnel picture] http://www.sciencephoto.com/images/download_wm_image.html/T840461Train_tunnel_construction-SPL.jpg?id=848400461 7. [International train pictures] http://www.veafotoaqui.com/images_miscelanea/AVE103a-755. jpg, http://static.guim.co.uk/sys-images/Travel/Pix/pictures/2007/07/02/TGVtrain460.jpg, http:// www.flickr.com/photos/15479266@N05/4340790663/in/photostream, http://www.uk2u.co.uk/ wp-content/plugins/wp-o-matic/cache/ed885_article-1260779845567-07950656000005DC222

REFERENCES and CITATIONS

393985_636x331.jpg, http://www.eu-digest.com/uploaded_images/Russian-Highspeedtrain-771237.jpeg 9. [First US car image] http://www.ausbcomp.com/~bbott/cars/oldsgas.jpg 10. [Car Assembly Line image] http://atlantis.coe.uh.edu/archive/sstudies/sstudies_lessons/ssles5/ production.html 11. [I-95 snowstorm] http://www.frugal-cafe.com/public_html/frugal-blog/frugal-cafe-blogzone/wpcontent/uploads/2010/02/interstate-95-snow-storm-feb-2010.jpg 12. [Chinese Train in Snow image] http://i.telegraph.co.uk/multimedia/archive/01794/snowtrain_1794925i.jpg 13. [Bolt Bus in traffic image] http://1.bp.blogspot.com/_k_z-E4rH2s0/SkfvhYNCVhI/AAAAAAAAB6Y/m_ b6X-WMwUU/s400/BoltBusEmpireState.jpg 14. Austen, Ben. The Megabus Effect. Bloomberg Business. April 7, 2011.

15. [BP Oil Spill image] http://i.telegraph.co.uk/multimedia/archive/01647/oil-spill-BP_1647492c.jpg 16. [Japanese bullet train with solar panels at station] http://greenz.jp/en/wp-content/ uploads/2010/03/solar-panels-bullet-train.jpg 17. [Germany electric power in train R.O.W.] http://www.vector1media.com/vectorone/?p=8036 18. [Taiwan HSR ad: Be There] http://files.coloribus.com/files/adsarchive/part_950/9502305/file/highspeed-rail-network-mouse-small-10413.jpg 19. [Renfe train and duck ad ] http://adsoftheworld.com/media/print/renfe_duck 20. [TGV ads] Antonio Pastor presentation 09 March 2011.

21. [Bikers] http://www.adverbox.com/admin/wordpress/wp-content/uploads/2008/01/sncf2. thumbnail.jpg 22. http://www.siemens.com/press/pool/de/pressebilder/mobility/imo-VelaroRus-02_072dpi.jpg

223

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APPENDIX

224

APPENDIX

10:58

12:42

2:26

4:10

5:54

7:38

9:22

11:06

12:50

4:42 4:49 5:21

5:32 5:44 5:01 6:11 6:42 6:06 6:26 7:16 6:33 7:02 7:28 6:45 7:05 7:55 8:26 7:50 8:10 9:00 8:17 8:46 9:12 8:29 8:49 9:39 10:10 9:34 9:54 10:44 10:01 10:30 10:56 10:13 10:33 11:23 11:54 11:18 11:38 12:28 11:45 12:14 12:40 11:57 12:17 1:07 1:38 1:02 1:22 2:12 1:29 1:58 2:24 1:41 2:01 2:51 3:22 2:46 3:06 3:56 3:13 3:42 4:08 3:25 3:45 4:35 5:06 4:30 4:50 5:40 4:57 5:26 5:52 5:09 5:29 6:19 6:50 6:14 6:34 7:24 6:41 7:10 7:36 6:53 7:13 8:03 8:34 7:58 8:18 9:08 8:25 8:54 9:20 8:37 8:57 9:47 10:18 9:42 10:02 10:52 10:09 10:38 11:04 10:21 10:41 11:31 12:02 5:18

New York/Moynihan Station

Newark, NJ

Philadelphia/Market East Station

Newark, DE

Baltimore

New Carrollton 4:22

6:10 6:32 6:49 7:22 7:54 8:02 8:16 8:33 9:06 9:38 9:46 10:00 10:17 10:50 11:22 11:30 11:44 12:01 12:34 1:06 1:14 1:28 1:45 2:18 2:50 2:58 3:12 3:29 4:02 4:34 4:42 4:56 5:13 5:46 6:18 6:26 6:40 6:57 7:30 8:02 8:10 8:24 8:41 9:14 9:46 9:54 10:08 10:25 10:58 11:30 11:38 11:52 12:09 12:42 6:18

Boston/South Station

9:14

4:11 4:22 4:50 5:30 5:55 6:06 6:34 7:14 7:39 7:50 8:18 8:58 9:23 9:34 10:02 10:42 11:07 11:18 11:46 12:26 12:51 1:02 1:30 2:10 2:35 2:46 3:14 3:54 4:19 4:30 4:58 5:38 6:03 6:14 6:42 7:22 7:47 7:58 8:26 9:06 9:31 9:42 10:10 10:50

Hartford

7:30

Washington/Union Station

Boston/South Station

New York/Moynihan Station 5:51 6:08 6:24 7:35 7:52 8:08 9:19 9:36 9:52 11:03 11:20 11:36 12:47 1:04 1:20 2:31 2:48 3:04 4:15 4:32 4:48 5:59 6:16 6:32 7:43 8:00 8:16 9:27 9:44 10:00 11:11 11:28 11:44

New Haven

5:13 5:30 5:46 5:46 6:57 7:14 7:30 7:30 8:41 8:58 9:14 9:14 10:25 10:42 10:58 10:58 12:09 12:26 12:42 12:42 1:53 2:10 2:26 2:26 3:37 3:54 4:10 4:10 5:21 5:38 5:54 5:54 7:05 7:22 7:38 7:38 8:49 9:06 9:22 9:22 10:33 10:50 11:06

Northbound Weekday Limited Service

4:02

Philadelphia/Market East Station

Washington/Union Station

Northbound Weekday Express Service - Long and Short Routes

Appendix A: Timetables

6:53 7:14 7:32 8:05 8:37 8:58 9:16 9:49 10:21 10:42 11:00 11:33 12:05 12:26 12:44 1:17 1:49 2:10 2:28 3:01 3:33 3:54 4:12 4:45 5:17 5:38 5:56 6:29 7:01 7:22 7:40 8:13 8:45 9:06 9:24 9:57 10:29 10:50 11:08 11:41 12:13 12:34 12:52 1:25

7:15 7:36 7:54 8:27 8:59 9:20 9:38 10:11 10:43 11:04 11:22 11:55 12:27 12:48 1:06 1:39 2:11 2:32 2:50 3:23 3:55 4:16 4:34 5:07 5:39 6:00 6:18 6:51 7:23 7:44 8:02 8:35 9:07 9:28 9:46 10:19 10:51 11:12 11:30 12:03 12:35 12:56 1:14 1:47

7:59 8:20 8:38 9:11 9:43 10:04 10:22 10:55 11:27 11:48 12:06 12:39 1:11 1:32 1:50 2:23 2:55 3:16 3:34 4:07 4:39 5:00 5:18 5:51 6:23 6:44 7:02 7:35 8:07 8:28 8:46 9:19 9:51 10:12 10:30 11:03 11:35 11:56 12:14 12:47 1:19 1:40 1:58 2:31

225

226

11:51

1:35

3:19

5:03

6:47

8:31

10:15

11:59

8:20

10:04

11:48

1:32

3:16

5:00

6:44

8:28

10:12

11:56

7:43

8:22

7:30 8:43 9:14 9:27

10:06 10:27 10:58

11:11 11:50 12:11 12:42 12:55 1:34 1:55 2:26 2:39

3:18

4:23

5:02

6:07

6:46

7:51

8:30

9:35

10:14

11:19 11:58

1:03

3:39 4:10 5:23 5:54 7:07 7:38 8:51 9:22 10:35 11:06 12:19 12:50

1:42 2:03

Boston/South Station

7:03 7:25 8:17 8:47 9:09 10:01 10:31 10:53 11:45 12:15 12:37 1:29 1:59 2:21 3:13 3:43 4:05 4:57 5:27 5:49 6:41 7:11 7:33 8:25 8:55 9:17 10:09 10:39 11:01 11:53 12:23 12:45 1:37

Worcester

6:40 7:02 7:55 8:24 8:46 9:39 10:08 10:30 11:23 11:52 12:14 1:07 1:36 1:58 2:51 3:20 3:42 4:35 5:04 5:26 6:19 6:48 7:10 8:03 8:32 8:54 9:47 10:16 10:38 11:31 12:00 12:22 1:15

Springfield

6:36

Windsor Locks/Bradley Airport

Suffolk

6:09 6:27 7:23 7:53 8:11 9:07 9:37 9:55 10:51 11:21 11:39 12:35 1:05 1:23 2:19 2:49 3:07 4:03 4:33 4:51 5:47 6:17 6:35 7:31 8:01 8:19 9:15 9:45 10:03 10:59 11:29 11:47 12:43

Hartford

10:07

5:54 6:13 7:06 7:38 7:57 8:50 9:22 9:41 10:34 11:06 11:25 12:18 12:50 1:09 2:02 2:34 2:53 3:46 4:18 4:37 5:30 6:02 6:21 7:14 7:46 8:05 8:58 9:30 9:49 10:42 11:14 11:33 12:26

New Haven

8:23

Nassau

6:39

New York/Moynihan Station

5:16 5:35 4:46 4:58 5:18 5:57 6:21 7:00 7:19 6:30 6:42 7:02 7:41 8:05 8:44 9:03 8:14 8:26 8:46 9:25 9:49 10:28 10:47 9:58 10:10 10:30 11:09 11:33 12:12 12:31 11:42 11:54 12:14 12:53 1:17 1:56 2:15 1:26 1:38 1:58 2:37 3:01 3:40 3:59 3:10 3:22 3:42 4:21 4:45 5:24 5:43 4:54 5:06 5:26 6:05 6:29 7:08 7:27 6:38 6:50 7:10 7:49 8:13 8:52 9:11 8:22 8:34 8:54 9:33 9:57 10:36 10:55 10:06 10:18 10:38 11:17 11:41

Trenton

Philadelphia/Market East Station

Wilmington

Baltimore

New Carrollton

Washington/Union Station

Northbound Weekday Regional Service - Long and Short Routes

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

7:53 9:06 9:37 9:48 10:50 11:21 11:32 12:34 1:05 1:16 2:18 2:49 3:00 4:02 4:33 4:44 5:46 6:17 6:28 7:30 8:01 8:12 9:14 9:45 9:56 10:58 11:29 11:40 12:42 1:13 1:24 2:26 3:08

APPENDIX

Northbound Weekday Airport Service 4:08 4:57 5:52 6:41 7:36 8:25 9:20 10:09 11:04 11:53 12:48 1:37 2:32 3:21 4:16 5:05 6:00 6:49 7:44 8:33 9:28 10:17

Washington/Union Station

Trenton

7:01 7:08 8:45 8:52 10:29 10:36 12:13 12:20 1:57 2:04 3:41 3:48 5:25 5:32 7:09 7:16 8:53 9:00 10:37 10:44 12:21 12:28

Jamaica / JFK Airport

7:38 7:30 7:49 9:22 9:14 9:33 11:06 10:58 11:17 12:50 12:42 1:01 2:34 2:26 2:45 4:18 4:10 4:29 6:02 5:54 6:13 7:46 7:38 7:57 9:30 9:22 9:41 11:14 11:06 11:25 12:58 12:50 1:09

Ronkonkoma / Islip Airport

8:00 8:10 9:44 9:54 11:28 11:38 1:12 1:22 2:56 3:06 4:40 4:50 6:24 6:34 8:08 8:18 9:52 10:02 11:36 11:46 1:20 1:30

Hartford

8:19 8:28 10:03 10:12 11:47 11:56 1:31 1:40 3:15 3:24 4:59 5:08 6:43 6:52 8:27 8:36 10:11 10:20 11:55 12:04 1:39 1:48

Windsor Locks/Bradley Airport

8:59 9:07 10:43 10:51 12:27 12:35 2:11 2:19 3:55 4:03 5:39 5:47 7:23 7:31 9:07 9:15 10:51 10:59 12:35 12:43 2:19 2:27

Springfield

10:25 10:33 12:09 12:17 1:53 2:01 3:37 3:45 5:21 5:29 7:05 7:13 8:49 8:57 10:33 10:41 12:17 12:25 2:01 2:09 3:45 3:53

New Haven

Newark, DE

6:11 6:33 6:46 6:55 7:55 8:17 8:30 8:39 9:39 10:01 10:14 10:23 11:23 11:45 11:58 12:07 1:07 1:29 1:42 1:51 2:51 3:13 3:26 3:35 4:35 4:57 5:10 5:19 6:19 6:41 6:54 7:03 8:03 8:25 8:38 8:47 9:47 10:09 10:22 10:31 11:31 11:53 12:06 12:15

New York/Moynihan Station

5:23 5:40 5:52 5:52 6:18 7:07 7:24 7:36 7:36 8:02 8:51 9:08 9:20 9:20 9:46 10:35 10:52 11:04 11:04 11:30 12:19 12:36 12:48 12:48 1:14 2:03 2:20 2:32 2:32 2:58 3:47 4:04 4:16 4:16 4:42 5:31 5:48 6:00 6:00 6:26 7:15 7:32 7:44 7:44 8:10 8:59 9:16 9:28 9:28 9:54 10:43 11:00 11:12 11:38

EWR Airport

BWI Airport

11:12

Philadelphia/Market East Station

4:19 4:35 4:45 5:24 6:03 6:19 6:29 7:08 7:47 8:03 8:13 8:52 9:31 9:47 9:57 10:36 11:15 11:31 11:41 12:20 12:59 1:15 1:25 2:04 2:43 2:59 3:09 3:48 4:27 4:43 4:53 5:32 6:11 6:27 6:37 7:16 7:55 8:11 8:21 9:00 10:05 10:44

PHL Airport

9:55

Wilmington

9:39

Baltimore

New Carrollton

Boston/South Station

Northbound Weekday Coastal Service

4:32 4:48 5:08 6:16 6:32 6:52 8:00 8:16 8:36 9:44 10:00 10:20 11:28 11:44 12:04 1:12 1:28 1:48 2:56 3:12 3:32 4:40 4:56 5:16 6:24 6:40 7:00 8:08 8:24 8:44 9:52 10:08 10:28

New Carrollton

5:22 5:58 7:06 7:42 8:50 9:26 10:34 11:10 12:18 12:54 2:02 2:38 3:46 4:22 5:30 6:06 7:14 7:50 8:58 9:34 10:42 11:18

Philadelphia/Market East Station

6:00 6:16 6:42 7:44 8:00 8:26 9:28 9:44 10:10 11:12 11:28 11:54 12:56 1:12 1:38 2:40 2:56 3:22 4:24 4:40 5:06 6:08 6:24 6:50 7:52 8:08 8:34 9:36 9:52 10:18 11:20 11:36 12:02

New York/Moynihan Station 4:05 4:36 5:49 6:20 7:33 8:04 9:17 9:48 11:01 11:32 12:45 1:16 2:29 3:00 4:13 4:44 5:57 6:28 7:41 8:12 9:25 9:56

Baltimore

Washington/Union Station

Trenton

Service continues on coastal route to Boston.

227

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

Northbound Weekday Commuter Service - North of New York 6:40 7:10 8:24 8:54 9:03

7:19

Morning

Jamaica / JFK Airport 7:27

5:43

Evening 5:04 5:34 6:48 7:18

9:19

Suffolk 7:43

5:59

7:35

6:54 7:27 8:38 9:11

Nassau 5:18 5:51 7:02 7:35

5:32

8:52

7:08

Ronkonkoma / Islip Airport 7:16

8:16 8:33 9:03 10:00 10:17 10:47

8:45 9:15 10:29 10:59

8:47 9:52 10:09 10:21 9:20 10:39 10:51 10:31 11:36 11:53 12:05 11:04 12:23 12:35 7:11 7:44 8:55 9:28

Springfield

6:32 7:05 8:16 8:49

Windsor Locks/Bradley Airport

6:15 6:48 7:59 8:32

Hartford 8:08 8:41 9:52 10:25

Boston/South Station

7:51 8:24 9:35 10:08

Riverside

7:29 8:02 9:13 9:46

Worcester

New Haven 5:53 6:26 7:37 8:10

New Carrollton 5:13 5:16 5:25

6:57 7:00 7:09

7:05 7:08 7:17

5:21 5:24 5:33

Evening

5:02 5:05 5:14 5:24 5:32 6:46 6:49 6:58 7:08 7:16

Morning

Washington/Union Station 5:10 5:13 5:22 5:32 5:40 6:54 6:57 7:06 7:16 7:24

7:29

6:01

5:45

7:37

7:21

5:53

5:37

BWI Airport 7:45

8:04 8:13

Newark, DE 8:12 8:21

6:28 6:37 7:50 7:53

6:06 6:09

6:20 6:29 7:42 7:45

5:58 6:01

5:31 5:34 5:46 5:49 6:01 7:15 7:18 7:30 7:33 7:45

Baltimore 5:39 5:42 5:54 5:57 6:09 7:23 7:26 7:38 7:41 7:53

6:18

7:54

6:10

Wilmington 8:02

6:27 6:36

8:03 8:12

6:19 6:28

PHL Airport 8:11 8:20

6:31 6:27 6:36 6:45 6:54 8:15 8:11 8:20 8:29 8:38

Philadelphia/Market East Station 6:39 6:35 6:44 6:53 7:02 8:23 8:19 8:28 8:37 8:46

6:56

6:44 6:52 7:06

7:04

8:36 8:44 8:58

7:14

6:52

8:28 8:36 8:50

Trenton

8:40

Cornwells Heights

8:48

7:06 7:00

8:42

6:58

Metropark

8:50

7:20

8:56

7:12

Newark, NJ

9:04

7:23 7:34 7:40

8:59 9:10 9:16

7:15 7:26 7:32

New York/Moynihan Station

9:07 9:18 9:24

228

New York/Moynihan Station

Northbound Weekday Commuter Service - South of New York

Benefit-Cost Analysis

$

Total Benefits

$

Total Costs

Benefit-Cost Ratio

EVALUATION SUMMARY

$ $ $ $ $

Construction Overhead Environmental Mitigation Existing Corridor Upgrades Rolling Stock

COSTS

$

$ $ $

$

$ $

$ $ $ $

Residual Life of the Asset

Reduced Auto and Air Emissions Reduced Cost in Fuel Increased Emissions from HS Train Operations

Environmental Sustainability Net Benefit

Time-travel Savings

Economic Competitiveness Net Benefit

Reduced Need for I-95 Expansion Maintenance of Additional Lanes Not Built

Maintenance

Value of Lives Saved Property Damage Only (PDO) Injury Fatal

Safety Net Benefit

BENEFITS

Year Time Period

Summary Tab

$ $ $ $

$ $ $ $ $

4.58

Nominal Sum

(102,298,008,432) $

70,229,759,034 12,641,356,626 2,106,892,771 14,000,000,000 3,320,000,000

468,522,666,885 $

28,517,967,036 $

8,782,725,801 $ 27,151,492,849 $ (4,852,291,303) $

110,174,221,563 $

10,151,636,104 $ 10,470,237,339 $

22,460,181,046 4,148,247,941 244,445,302,413 7,072,946,095

Nominal Sum

$ $ $ $

$ $ $ $ $

2.42

All Years (3%)

(74,708,094,625) $

48,809,432,252 8,785,697,805 1,875,741,692 13,038,886,640 2,198,336,235

180,457,228,230 $

8,742,377,880 $

3,193,167,017 $ 8,782,725,801 $ (1,761,537,454) $

50,387,531,050 $

5,852,679,833 $ 3,997,539,750 $

8,172,335,736 1,527,451,955 88,989,402,601 2,573,554,061

All Years (3%)

$ $ $ $

$ $ $ $ $

1.38

All Years (7%)

(52,268,426,964) $

31,686,002,554 5,703,480,460 1,624,318,894 11,919,742,904 1,334,882,152

71,881,503,917 $

1,904,440,704

1,043,731,507 $ 8,782,725,801 $ (623,646,303) $

23,338,628,453 $

2,969,170,125 $ 1,278,301,959 $

2,674,671,328 513,070,321 29,158,128,024 842,281,996

All Years (7%)

-

-

-

-

-

$ $ $ $ $

$

$ $ $

$

$ $

$ $ $ $

4,316,033,916 $

316,033,916 4,000,000,000 -

-8 2012

$ $

$ $ $ $

$ $ $ $ $ 6,596,764,231 $

5,407,427,314 973,336,917 216,000,000

2,016,981,384 $

36,402,994 $ 114,597,780 $ (34,472,021) $

603,000,017 $

-

94,797,251 62,219,822 1,145,054,916 29,852,647

0 2020

$ $ $ $

$ $ $ $ $ 80,000,000 $

80,000,000

13,298,206,557 $

173,247,770 $ 535,976,128 $ (90,582,023) $

2,207,183,048 $

5,075,818,052 $ - $

443,368,655 81,000,926 4,823,154,593 139,621,430

15 2035

$ $

$ $ $ $

-

-

$

$ $ $ $ $

11,242,112,857 $

239,384,667 $ 739,356,457 $ (128,801,058) $

2,951,687,981 $

-

611,608,355 111,737,360 6,653,338,281 192,601,873

30 2050

-

-

13,135,220,608

281,574,771 869,082,859 (168,926,151)

3,425,033,592

-

718,920,262 131,342,633 7,820,723,277 226,395,515

45 2065

APPENDIX

Appendix B-1 : BCA

229

230

Total 1,549,018,953 1,358,275,059 121,038,041 23,235,284 46,470,569 246,273,914,977 177,866,840,398 1,210,380

7,936,692 7,322,430 257,111 119,050 238,101 1,039,443,540 165,372,113 2,571

2020 30,921,333 27,188,203 2,341,670 463,820 927,640 4,861,498,414 3,594,455,288 23,417

2035

2050 41,685,022 36,427,842 3,381,353 625,275 1,250,551 6,706,231,964 4,979,329,072 33,814

2065 48,533,629 42,303,347 4,046,269 728,004 1,456,009 7,882,897,609 5,862,901,522 40,463

"HSR Passengers Diverted" is based on current and projected inter-city travel demand, the size of cities and distance between city pairs, travel time on high-speed rail between city pairs, and the average price of a high-speed rail ticket relative to plane tickets and gas prices. This does not include induced ridership, which accounts for an additional 6.2 million riders in 2035.

Sources: 1. Penn Design Studio Team 2011 Ridership Projections.

HSR Passengers Diverted1 Diverted from Car Diverted from Air Diverted from Acela Diverted from Regional Rail VMT Saved1 Travel Time Savings (minutes)1 Flights Diverted1

Modal Shift Tab

Benefit-Cost Analysis

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

APPENDIX

Benefit-Cost Analysis Safety Tab Year

Nominal Sum

All Years (3%)

All Years (7%)

2012

2020

Diverted From Car VMT Reduced VMT Reduced / 100 M Property Damage Reduction MAIS 0 Injuries Prevented MAIS 1 Injuries Prevented MAIS 2 Injuries Prevented MAIS 3 Injuries Prevented MAIS 4 Injuries Prevented MAIS 5 Injuries Prevented Fatalities Prevented

-

Value of Lives Saved Value of Reduced Property Damage Value of MAIS 0 Injuries Prevented Value of MAIS 1 Injuries Prevented Value of MAIS 2 Injuries Prevented Value of MAIS 3 Injuries Prevented Value of MAIS 4 Injuries Prevented Value of MAIS 5 Injuries Prevented Total of MAIS Injuries Prevented Value of Fatalities Prevented

$ $ $ $ $ $ $ $ $ $

22,460,181,046 4,148,247,941 5,766,106,171 188,387,713,561 37,301,806,401 10,685,107,201 1,897,694,870 406,874,209 244,445,302,413 7,072,946,095

$ $ $ $ $ $ $ $ $ $

PDO Crashes per 100 M VMT Number of Injured People Injury Components Medical Emergency Services Market Productivity Household Productivity Insurance Admin.

Workplace Cost Legal Costs Subtotal Non-Injury Components TravelDelay PropertyDamage Subtotal Total

8,172,335,736 1,527,451,955 2,143,863,783 68,546,537,564 13,572,592,529 3,887,870,861 690,493,081 148,044,783 88,989,402,601 2,573,554,061

$ $ $ $ $ $ $ $ $ $

$ $ $ $ $ $ $ $ $ $

-

$ $ $ $ $ $ $ $ $ $

94,797,251 62,219,822 137,666,258 795,124,372 157,439,011 45,098,425 8,009,564 1,717,286 1,145,054,916 29,852,647

72.9 2,002,667

2050

27,188,203 4,861,498,414 48.61 21,730.90 3,544.31 6,371.26 649.49 208.29 64.18 16.75 73.89 $ $ $ $ $ $ $ $ $ $

National Summary of Total Costs in Millions of 2010 Dollars from Car Accidents1 MAIS 1 MAIS 2 MAIS 3 131.1 13.4 4.3 3,599,995 366,987 117,694

MAIS 0 447.4 12,288,482

2,674,671,328 513,070,321 735,008,838 22,434,156,475 4,442,086,725 1,272,436,309 225,987,050 48,452,627 29,158,128,024 842,281,996

2035

7,322,430 1,039,443,540 10.39 4,646.31 757.81 1,362.25 138.87 44.54 13.72 3.58 15.80

443,368,655 81,000,926 111,577,510 3,718,812,732 736,345,433 210,926,243 37,460,892 8,031,782 4,823,154,593 139,621,430

$ $ $ $ $ $ $ $ $ $

MAIS 4

$ $ $

456,216 $ 843,119 $ 1,299,336 $

71,572 $ 94,350 $ 165,922 $

129,324 $ 639,797 $ 769,121 $

14,354 $ 67,088 $ 81,442 $

5,115 $ 36,996 $ 42,111 $

1,675 $ 16,486 $ 18,161 $

$

1,438,530 $

181,662 $

1,757,944 $

1,133,725 $

1,012,635 $

583,686 $

$ $ $ $ $ $ $ $

396,128 16,145 291,104 95,204 123,332 41,943 24,966 988,823

$ $ $ $ $ $ $ $

265,111 3,597 424,466 124,233 117,226 33,137 84,513 1,052,283

$ $ $ $ $ $ $ $

252,998 2,002 388,810 114,678 102,805 23,213 86,018 970,524

$ $ $ $ $ $ $ $

$ $ $ $ $ $ $ $ $ $

220,149 1,392 178,457 46,960 54,213 7,877 56,477 565,525

$ $ $ $ $ $ $ $

718,920,262 131,342,633 180,922,426 6,030,037,963 1,193,980,777 342,015,946 60,742,667 13,023,498 7,820,723,277 226,395,515

Fatal 0.3 9,463

17,612 26,703 65,904 28,975 139,194

93 2,037 3,055 7,407 3,148 15,740

611,608,355 111,737,360 153,916,468 5,129,945,274 1,015,757,460 290,963,854 51,675,721 11,079,504 6,653,338,281 192,601,873

42,303,347 7,882,897,609 78.83 35,236.55 5,747.09 10,330.97 1,053.15 337.75 104.07 27.16 119.82

MAIS 5 1.3 36,264

$ $ $ $ $ $ $ $

$ $ $ $ $ $ $ $

2065

36,427,842 6,706,231,964 67.06 29,976.86 4,889.23 8,788.88 895.95 287.33 88.53 23.10 101.93

145,453 373 191,937 65,323 29,837 3,584 34,938 471,443

Total 1.5 41,821

$ $ $ $ $ $ $ $

42,721 1,611 1,151,144 370,351 71,773 16,826 197,487 1,851,912

672 18,463,373 $ $ $ $ $ $ $ $

1,322,653 44,768 2,625,918 846,507 572,497 158,702 484,398 6,055,443

4,002 $ 4,133 $ 8,135 $

17,688 $ 19,863 $ 37,551 $

699,947 1,721,832 2,421,779

479,579 $

1,889,463 $

8,477,222

Passengers Diverted From Cars Annually Total Passenger VMT in 20002 Total 2000 VMT / 100 Value of a Life3

$

2,749,803,000,000 27,498 6,000,000

Sources: 1. L. Blincoe, E. Seay, and E. Zaloshnja et. al., The Economic Impact of Motor Vehicle Crashes, U.S. Department of Transportation National Highway Safety Administration, 2002.

2. http://www.fhwa.dot.gov/policyinformation/travel/tvt/history/.

3. Office of the Secretary of Transportation, Treatment of the Economic Value of a Statistical Life in Departmental Analyses, 2009 Annual Revision.

PDO: Property Damage Only MAIS: Maximum Injury Severity Level Experienced by the Victim "Fatalities Prevented" represents the costs associated with deaths caused by accidents.

"Value of Lives Saved" represents the foregone lifetime earnings potential of an individual.

Benefit-Cost Analysis Maintenance Reduction in Highway Construction and Maintenance Costs Segment Miles Highway Construction Cost (Per Mile) Additional Lane of Traffic Constructed (Both Directions) Total Lanes Required Total Additional Lane Construction Lane Maintenance Cost Per Mile (Resurfacing - Every 7th Year After Construction) Reduced Highway Maintenance (4 Lanes)

$ $ $ $ $

444 5,717,299 2,537,909,026 4 5,075,818,052 1,474,183 2,617,559,335

Sources: 1. State of Florida Department of Transportation, Generic Cost Per Mile. ftp://ftp.dot.state.fl.us/LTS/CO/Estimates/CPM/summary.pdf.

231

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

Benefit-Cost Analysis Environmental Sustainability Tab

Total VMT Reduced Savings from CO2 Savings from SO2 Savings from CO Savings from NOX Savings from VOC Savings from PM10 Air Savings from CO Air Savings from NOX Air Savings from CO2 Total Emissions Savings

$ $ $ $ $ $ $ $ $ $

Nominal Sum 246,273,914,977 2,912,997,092 34,052,359 2,937,201,967 1,601,825,184 843,965,413 134,964,670 14,755,153 178,008,875 124,955,088 8,782,725,801

$ $ $ $ $ $ $ $ $ $

1,059,919,783 12,390,252 1,068,726,942 582,838,276 307,084,288 49,108,090 5,252,434 63,366,330 44,480,621 3,193,167,017

$ $ $ $ $ $ $ $ $ $

346,894,345 4,055,126 349,776,784 190,753,400 100,503,646 16,072,272 1,656,821 19,988,199 14,030,914 1,043,731,507

$ $ $ $ $ $ $ $ $ $

-

$ $ $ $ $ $ $ $ $ $

1,039,443,540 12,294,830 143,724 12,396,991 6,760,793 3,562,108 569,643 31,343 378,129 265,432 36,402,994

$ $ $ $ $ $ $ $ $ $

2035 4,861,498,414 57,503,170 672,201 57,980,979 31,620,363 16,660,053 2,664,231 285,462 3,443,860 2,417,452 173,247,770

$ $ $ $ $ $ $ $ $ $

2050 6,706,231,964 79,323,197 927,272 79,982,314 43,618,957 22,981,840 3,675,194 412,204 4,972,907 3,490,781 239,384,667

$ $ $ $ $ $ $ $ $ $

7,882,897,609 93,241,129 1,089,970 94,015,894 51,272,275 27,014,201 4,320,038 493,261 5,950,789 4,177,215 281,574,771

Train Operational Emissions - CO2 Train Operational Emissions - SO2 Train Operational Emissions - CO Train Operational Emissions - NOx Train Operational Emissions - PM10 Total Train Operational Emissions

$ $ $ $ $ $

3,990,994,844 680,491,052 111,546,306 12,403,453 56,855,647 4,852,291,303

$ $ $ $ $ $

1,448,859,200 247,040,089 40,494,889 4,502,851 20,640,425 1,761,537,454

$ $ $ $ $ $

479,389,895 81,739,152 13,398,707 1,489,877 6,829,381 582,847,012

$ $ $ $ $ $

-

$ $ $ $ $ $

28,353,132 4,834,397 792,456 88,118 403,918 34,472,021

$ $ $ $ $ $

74,503,438 12,703,330 2,082,334 231,546 1,061,375 90,582,023

$ $ $ $ $ $

105,938,479 18,063,212 2,960,927 329,242 1,509,198 128,801,058

$ $ $ $ $ $

138,941,246 23,690,403 3,883,338 431,810 1,979,355 168,926,151

Net Pollution Redution

$

3,930,434,498 $

460,884,495 $

-

$

246,273,914,977 5,387,275,561 27,151,492,849 $

Total VMT Reduced Gallons of Gas Not Used Fuel Reduction Savings

All Years (7%)

1,431,629,564 $

Automotive Pollution Reduction Pollution Reduction (g) 102,427,384,076,223 18,688,312,427 2,778,503,444,218 215,217,915,200 84,693,865,510 27,160,135,102 2,002,912,296,305 45,077,805,578 97,747,211,778 2,469,103,191 2,469,103,191 130,505,786,339

9,879,311,072 $

Pollution Reduction (tons) 112,906,864 20,600 3,062,776 237,237 93,359 29,939 2,207,833 49,690 107,748 2,722 2,722 143,858

Car Pollution Reduction (cost/tons) CO2 SO2 CO NOX VOC PM10 Pollution Savings

CO2 Reduced (tons/year) CO Reduced (tons/year) NOX Reduced (tons/year)

-

10,288 33 56

-

Train Operational Emissions6, 7 2020 9,433,272 2,580,282,892 1,935,212,169

CO2 (tons/year) SO2 (tons/year) CO (tons/year) Nox (tons/year) PM10 (tons/year)

CO2 SO2 CO NOX PM10

Reduced Automotive Fuel Consumption11, 12, 13 Weighted Average of Fuel Economy in 2035 Vehicle Miles Reduced Gallons of Gas Not Used Average Gas Price/Gallon $ Gas Price Escalation Factor Average Vehicle Occupancy

1,930,973 $

82,665,747 $

110,583,609 $

112,648,620

$

1,039,443,540 22,737,970 114,597,780 $

4,861,498,414 106,345,942 535,976,128 $

6,706,231,964 146,699,741 739,356,457 $

7,882,897,609 172,439,463 869,082,859

Sedan 415.91 Light Truck 0.08 SUVs 11.28 Pickup Trucks 0.87 0.34 0.11 8.13 0.18 0.40 0.01 0.01 0.53

Value of Automotive Pollution Reduction2,3 Price Per Ton $ 25.8 $ 1,653 $ 959 $ 6,752 $ 9,040 $ 4,508

2035

2050

57% 43% 33% 10%

Total Price $2,912,997,091.6 $34,052,359.0 $2,937,201,967.3 $1,601,825,184.4 $843,965,413.5 $134,964,670.0 $8,465,006,685.7

2065

5,322 16,910 10,442 90 32,674

7,685 24,417 15,078 129 47,181

9,196 29,219 18,043 155 56,459

93,700 298 510

135,302 430 737

161,908 514 881

2035

1,098,959 2,925 826 13 90 Energy Grid Emissions Factors8, 9, 10 Price per Ton Tons of Emissions per kWh $25.8 5.68E-04 $1,653 1.51127E-06 $959 4.27E-07 $6,752 6.74E-09 $4,508 4.63E-08

Average g/VMT

2050

2065

24,787,780 6,780,201,441 5,085,151,081

35,246,423 9,640,954,067 7,230,715,551

46,226,659 12,644,377,953 9,483,283,465

2,887,730 7,685 2,171 34 235

4,106,143 10,928 3,088 49 335

5,385,320 14,332 4,049 64 439

Cost per kWh $ $ $ $ $

0.01465 0.00250 0.00041 0.00005 0.00021

45.7 246,273,914,977 5,387,275,561 3.19 8% 1.59

Sources: 1. University of California at Berkley, "Environmental Life-cycle Assessment of Passenger Transportation: A Detailed Methodology for Energy, Greenhouse Gas and Criteria Pollutant Inventories of Automobiles, Buses, Light Rail, Heavy Rail and Air, v.2, UC Berkeley, UC Berkeley Center for Future Urban Transport, 2008, http://escholarship.org/uc/item/5670921q.

2. David J. Nowak, Daniel E. Crane, and Jack C. Stevens, "Air Pollution Removal by Urban Trees and Shrubs in the United States," Urban Forestry and Greening, Vol.4: 115-123, 2006.

3. Appendix 15A, Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866, http://www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/sem_finalrule_appendix15a.pdf.

4. PennDesign Studio Team 2011 Analysis (See Accompanying Documentation).

5. Brandon Graver and Christopher Frey, “Estimation of Air Carrier Emissions at Raleigh-Durham International Airport,” Air & Waste Management Association, Paper 2009-A-486-AWMA, June 2009.

6. David Levinson, Adib Kanafani, and David Gillen, Air, High Speed Rail or Highway: A Cost Comparison in the California Corridor, Transportation Quarterly v. 53, i.1 123-132, 1999.

7. Mofair, "Energierückgewinnung beim Bremsen: DB AG bremst Vorteil des elektrischen Verkehrs aus," Eisenbahn-Revue International, March 2011.

8. http://tonto.eia.doe.gov/ftproot/environment/e-supdoc.pdf.

9. P. Torcellini and M. Deru, "Source Energy and Emission Factors for Energy Use in Buildings" National Renewable Energy Laboratory, June 2007, www.nrel.gov/docs/fy07osti/38617.pdf.

10. http://www.eia.doe.gov/cneaf/electricity/epa/epa_sum.html.

11. Studio estimate based on average gasoline prices from 2000-2008, http://www.eia.doe.gov/steo/.

12. Weighted Fuel Economy Average: Pew Center on Global Climate Change, Reducing GHG for US Transportation.

13. Al Stenstrup and Mittsy Voiles, "Average Vehicle Occupancy In Your Community," www.extraordinaryroadtrip.org/pdfs/avo.pdf.

14. US Bureau of Transit Statistics.

232

2065

$

Automobiles by Type14

Airline Emissions Reduction by Year4, 5 2020 584 1,857 1,147 10 3,588

2012

-

477 0.03 11.8 1.1 0.41 0.11 9.5 0.23 0.48 0.01 0.01 0.5

-

Annual Train Miles Energy Required for Train Operations (kWh) (@ 274 kWh Per Mile) New Grid Energy Required for Train Operations (Excludes Regenerative Braking Energy)

2020

3,233,336,334 $

Pickup g/VMT

Turbo Prop Flights Replaced Regional Jet Flights Replaced Narrow Body Jet flights Replaced Total Flights Replaced - Daily Total Flights Replaced - Annual

2012

2012

-

Average Auto Emissions per VMT by Vehicle Type1 Car g/VMT SUV g/VMT 367 479 0.11 0.03 10.9 11.7 0.85 0.84 0.31 0.38 0.11 0.11 7.3 9.1 0.17 0.19 0.35 0.45 0.01 0.01 0.01 0.01 0.55 0.5

CO2 SO2 CO NOX VOC PM10 Startup - CO Startup - Nox Startup - VOC Brake Wear - PM10 Tire Wear - PM10 Evaporative Losses - VOC

CO2 SO2 CO NOX VOC PM10 Startup - CO Startup - Nox Startup - VOC Brake Wear - PM10 Tire Wear - PM10 Evaporative Losses - VOC

All Years (3%)

APPENDIX

Benefit-Cost Analysis Residual Asset Life

Asset Rolling Stock Track Signals Station: At-Grade Station: Aereal Station: Underground Guideway: Aereal Guideway: Built-up Fill Guideway: Underground Cut & Cover Guideway: Underground Tunnel Guideway: Retained Cut or Fill Right of Way

Asset Life (Years)1 25 30 30 70 70 125 80 80 125 125 125 125 Construction Cost

Annual Depreciation

Nominal Residual Value

Residual Value (3%)

Residual Value (7%)

STATIONS Station Washington Union Station New Carrollton Odenton BWI Airport (On Airport) Baltimore Downtown Bayview Aberdeen Newark, DE Philadelphia Airport Philadelphia Market East Cornwells Heights Trenton Princeton Jct Metropark Newark Liberty Airport New York Moynihan Station Jamaica/JFK Airport Nassau Hub Suolk Hub/Route 110 Ronkonkoma/Islip Airport Stony Brook Highspeed Meriden Highspeed Hartford Tolland/UConn Bradley Airport Eastborough/I-495 Riverside/I-95 Back Bay Highspeed (New) Boston South Station

Type At-Grade At-Grade At-Grade Underground Underground At-Grade At-Grade At-Grade Underground Underground At-Grade At-Grade At-Grade Underground (Trench) Underground Underground Aereal Underground (Trench) At-Grade Underground (Trench) At-Grade Aereal Underground At-Grade Underground At-Grade At-Grade Underground Underground

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

3,000,000,000 250,000,000 250,000,000 500,000,000 500,000,000 250,000,000 250,000,000 250,000,000 500,000,000 3,000,000,000 250,000,000 200,000,000 250,000,000 300,000,000 500,000,000 5,000,000,000 250,000,000 250,000,000 250,000,000 250,000,000 150,000,000 250,000,000 550,000,000 150,000,000 500,000,000 250,000,000 250,000,000 2,000,000,000 3,000,000,000

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

(42,857,143) (3,571,429) (3,571,429) (4,000,000) (4,000,000) (3,571,429) (3,571,429) (3,571,429) (4,000,000) (24,000,000) (3,571,429) (2,857,143) (3,571,429) (2,400,000) (4,000,000) (40,000,000) (3,571,429) (2,000,000) (3,571,429) (2,000,000) (2,142,857) (3,571,429) (4,400,000) (2,142,857) (4,000,000) (3,571,429) (3,571,429) (16,000,000) (24,000,000)

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

1,285,714,286 107,142,857 107,142,857 340,000,000 340,000,000 107,142,857 107,142,857 107,142,857 340,000,000 2,040,000,000 107,142,857 85,714,286 107,142,857 204,000,000 340,000,000 3,400,000,000 107,142,857 170,000,000 107,142,857 170,000,000 64,285,714 107,142,857 374,000,000 64,285,714 340,000,000 107,142,857 107,142,857 1,360,000,000 2,040,000,000

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

394,144,510 32,845,376 32,845,376 104,229,326 104,229,326 32,845,376 32,845,376 32,845,376 104,229,326 625,375,955 32,845,376 26,276,301 32,845,376 62,537,596 104,229,326 1,042,293,259 32,845,376 52,114,663 32,845,376 52,114,663 19,707,225 32,845,376 114,652,258 19,707,225 104,229,326 32,845,376 32,845,376 416,917,303 625,375,955

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

85,860,490 7,155,041 7,155,041 22,705,330 22,705,330 7,155,041 7,155,041 7,155,041 22,705,330 136,231,977 7,155,041 5,724,033 7,155,041 13,623,198 22,705,330 227,053,295 7,155,041 11,352,665 7,155,041 11,352,665 4,293,024 7,155,041 24,975,862 4,293,024 22,705,330 7,155,041 7,155,041 90,821,318 136,231,977

233

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

Benefit-Cost Analysis Residual Asset Life (Continued) Construction Cost

Annual Depreciation

Nominal Residual Value

Residual Value (3%)

Residual Value (7%)

ROW ACQUISITIONS Segment $ Landover New Carrollton Station $ New Carrollton to Odenton $ $ Odenton Station BWI to Wilkens Ave Tunnel $ Wilkins Ave Tunnel to Carey St (leave original NEC) $ $ Baltimore Charles Center Station $ Aberdeen Station Northern Maryland (third river crossing) $ $ North East and Elkton curves to I-95 $ Newark, Del. Station Post Newark to Wilmington Bypass $ Wilmington Bypass $ $ Bellefonte, Claymont, Marcus Hook, Chester to PHL Approach $ Airport station approach (break point from original NEC) Philadelphia Junction (o to 30th Street and to Market East) to South Street $ $ I-95 to Comly (re-join NEC; aerial) Cornwells Heights Station $ After Cornwells to the PA/NJ state line $ Olden Ave. to Princeton Jct $ $ NB to I-287 crossing $ Curves in Metuchen to Metropark Metropark Station $ Metropark to Elizabeth junction point (leaving NEC; trains to Newark Downtown stay $ on NEC) Along LIRR branch to Jamaica $ Jamaica Station $ $ Meadowbrook St. Pkwy to rejoining LIRR (trench section) $ Suolk County Line Farmingdale/Rt. 110 Station $ to Ronkonkoma $ $ Ronkonkoma/MacArthur Station to SUNY $ SUNY/Terryville Station $ $ Follow NEC to New Haven New Haven Station $ Station to Shore/Inland Junctoin Point $ I-91 alignment $ Meriden HSR Station $ I-691 to rejoin Amtrak alignment $ Curvy section around Berlin $ $ Southern I-84 segment Tolland/UConn HSR Station $ Northern End I-84 to rail junction with Boston-Springfield line $ Rail Junction two (split/join point to serve Worcester) $ Mass Pike alignment to rail junction three (trains split/join from Worcester) $ Eastborough/Rte. 495 HSR Station $ Rail junction four (access for commuter trains to Eastborough station) to Saxonville$ $ Tunnel near Saxonville $ Mass Pike alignment Riverside HSR Station $ Boston Core Mass Pike Alignment $ $ Boston South Station

234

165,651 71,486 358,910 144,944 631,050 631,050 522,589 148,395 386,518 329,576 112,159 204,598 128,182 271,154 113,392 96,630 155,297 89,727 458,990 279,535 325,385 276,084 177,483 749,372 1,035,317 680,351 640,910 147,902 187,343 1,479,024 187,343 522,589 207,063 196,710 58,668 48,315 224,319 55,217 86,276 345,106 531,463 62,119 1,100,887 59,161 593,582 103,532 912,065 305,665 493,008 493,008 1,498,744 295,805

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

(1,325) (572) (2,871) (1,160) (5,048) (5,048) (4,181) (1,187) (3,092) (2,637) (897) (1,637) (1,025) (2,169) (907) (773) (1,242) (718) (3,672) (2,236) (2,603) (2,209) (1,420) (5,995) (8,283) (5,443) (5,127) (1,183) (1,499) (11,832) (1,499) (4,181) (1,657) (1,574) (469) (387) (1,795) (442) (690) (2,761) (4,252) (497) (8,807) (473) (4,749) (828) (7,297) (2,445) (3,944) (3,944) (11,990) (2,366)

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

112,642 48,611 244,059 98,562 429,114 429,114 355,360 100,909 262,832 224,112 76,268 139,127 87,164 184,385 77,106 65,708 105,602 61,015 312,113 190,084 221,262 187,737 120,688 509,573 704,015 462,639 435,819 100,574 127,393 1,005,736 127,393 355,360 140,803 133,763 39,894 32,854 152,537 37,547 58,668 234,672 361,395 42,241 748,603 40,229 403,635 70,402 620,204 207,852 335,245 335,245 1,019,146 201,147

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

34,531 14,902 74,818 30,215 131,548 131,548 108,938 30,934 80,573 68,703 23,381 42,650 26,721 56,524 23,638 20,143 32,373 18,704 95,681 58,272 67,829 57,552 36,998 156,213 215,821 141,825 133,603 30,832 39,053 308,315 39,053 108,938 43,164 41,006 12,230 10,072 46,761 11,510 17,985 71,940 110,788 12,949 229,489 12,333 123,737 21,582 190,128 63,719 102,772 102,772 312,426 61,663

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

7,522 3,246 16,298 6,582 28,656 28,656 23,731 6,739 17,552 14,966 5,093 9,291 5,821 12,313 5,149 4,388 7,052 4,075 20,843 12,694 14,776 12,537 8,060 34,029 47,014 30,895 29,104 6,716 8,507 67,163 8,507 23,731 9,403 8,933 2,664 2,194 10,186 2,507 3,918 15,671 24,134 2,821 49,992 2,687 26,955 4,701 41,417 13,880 22,388 22,388 68,059 13,433

APPENDIX

Benefit-Cost Analysis Residual Asset Life (Continued) Construction Cost GUIDEWAYS AND TRACK ELEMENTS Segment Type Approach BWI Tunnel $ BWI to Wilkens Ave Tunnel Tunnel $ Wilkins Ave Tunnel to Carey St (leave original NEC) Tunnel $ S. Wolfe St. to I-895 (rejoins original NEC) Tunnel $ Leaving Baltimore Tunnel $ I-695 Curve (to Rte. 43) Tunnel $ Northern Maryland (two river crossings) Aereal Structure $ Tunnel to Philadelphia Junction Tunnel $ East) to South Street $ Philadelphia Junction (o to 30th Street and to MarketTunnel Spring Garden St. to I-95 (tunnel) Tunnel $ I-95 to Comly (re-join NEC; aerial) Aereal Structure $ I-95 existing NEC alignment Aereal Structure $ PJS to New Brunswick Tunnel $ NB to I-287 crossing Aereal Structure $ Approaching EWR Tunnel $ Junction point between original NEC and New NEC (Newark TunnelDowntown trains re-join $ for new tunnel) Junction point to west edge of Hudson Tunnel $ East edge of Manhattan to end of tunnel Tunnel $ to Floral Park Junction Tunnel $ Floral Park Curve Tunnel $ To Garden City and Clinton Ave Tunnel $ Meadowbrook St. Pkwy to rejoining LIRR (trench section) Retained Cut (Trench) $ Suolk County Line Retained Cut (Trench) $ to Ronkonkoma Retained Cut (Trench) $ Major north turn under Holbrook Tunnel $ to SUNY Retained Cut (Trench) $ Tunnel land approach (to water edge) Tunnel $ Long Island Sound Tunnel (under water portion) Tunnel $ Tunnel to rejoin NEC Tunnel $ approach Hartford Tunnel $ $ Rail Junction two (split/join point to serve Worcester) Aereal Structure Mass Pike alignment to rail junction three (trains split/join Aereal from Structure Worcester) $ Rail junction four (access for commuter trains to Eastborough Tunnel station) to Saxonville$ Tunnel near Saxonville Tunnel $ Mass Pike alignment Tunnel $ Boston Core Mass Pike Alignment Tunnel $

Annual Depreciation

Nominal Residual Value

Residual Value (3%)

Residual Value (7%)

2

Total

$

558,512,882 525,659,183 525,659,183 336,750,414 574,939,732 563,440,937 502,733,435 443,524,936 459,951,785 312,110,140 128,759,275 154,511,130 2,119,063,583 94,423,468 361,390,688 887,049,872 509,232,334 887,049,872 657,073,979 147,841,645 607,793,431 531,834,728 122,731,091 1,227,310,910 394,244,387 433,649,855 180,695,344 2,956,832,906 361,390,688 640,647,130 68,671,613 492,146,561 756,841,728 509,232,334 71,532,930 1,248,440,560 44,723,054,319

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

(4,468,103) (4,205,273) (4,205,273) (2,694,003) (4,599,518) (4,507,527) (6,284,168) (3,548,199) (3,679,614) (2,496,881) (1,609,491) (1,931,389) (16,952,509) (1,180,293) (2,891,126) (7,096,399) (4,073,859) (7,096,399) (5,256,592) (1,182,733) (4,862,347) (4,254,678) (981,849) (9,818,487) (3,153,955) (3,469,199) (1,445,563) (23,654,663) (2,891,126) (5,125,177) (858,395) (6,151,832) (6,054,734) (4,073,859) (572,263) (9,987,524)

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

379,788,760 357,448,245 357,448,245 228,990,282 390,959,018 383,139,837 251,366,717 301,596,956 312,767,214 212,234,895 64,379,637 77,255,565 1,440,963,236 47,211,734 245,745,668 603,193,913 346,277,987 603,193,913 446,810,306 100,532,319 413,299,533 361,647,615 83,457,142 834,571,419 268,086,183 294,881,901 122,872,834 2,010,646,376 245,745,668 435,640,048 34,335,807 246,073,281 514,652,375 346,277,987 48,642,393 848,939,581

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

28,517,967,036 $

116,426,842 109,578,205 109,578,205 70,198,537 119,851,161 117,454,138 77,058,187 92,456,610 95,880,929 65,062,059 19,736,018 23,683,222 441,737,137 14,473,080 75,335,016 184,913,220 106,153,886 184,913,220 136,972,756 30,818,870 126,699,799 110,865,550 25,584,358 255,843,577 82,183,653 90,398,064 37,667,508 616,377,401 75,335,016 133,548,437 10,525,876 75,435,447 157,770,206 106,153,886 14,911,658 260,248,236

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

25,362,438 23,870,530 23,870,530 15,292,058 26,108,392 25,586,224 16,786,365 20,140,760 20,886,714 14,173,127 4,299,297 5,159,156 96,228,074 3,152,818 16,410,989 40,281,519 23,124,576 40,281,519 29,838,162 6,713,587 27,600,300 24,150,966 5,573,300 55,732,997 17,902,897 19,692,326 8,205,495 134,271,731 16,410,989 29,092,208 2,292,958 16,432,867 34,368,682 23,124,576 3,248,358 56,692,509

8,742,377,880 $

1,904,440,704

Sources: 1 United States Department of Transportation Federal Transit Administration, "Reporting Instructions for the Section 5309 New Starts Criteria," http://www.fta.dot.gov/planning/newstarts/planning_environment_9059.html#V-4_Capital_Costs.

Note: Straight line depreciation was deducted for forty years and then discounted.

2 Note: Tunnels at stations were not included in this section to avoid double-counting.

235

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

Appendix B-2: Air Emissions Methodology

First Considerations There are many factors that contribute to the production of emissions by air travel in the Northeast Corridor: the number of flights, the distances they fly, the type of aircraft and engines used, the amount of traffic and weather delays, the various kinds of emissions emitted, and more. A truly robust model would take all of these factors into consideration but a simplified model was used for the purposes of this study.

Flights Considered This analysis only looked at the air travel between the cities of Boston, New York, Philadelphia, Baltimore and Washington, DC. In New York, John F. Kennedy, Newark and La Guardia airports were included. Both Dulles International and Reagan International were included for Washington, DC. While there are other commercial airports in other cities within the Northeast megaregion, these five cities are by far the largest and represent the greatest number of flights. In addition, four of these airports are proposed stops on the HSR line (BWI, PHL, EWR and JFK).

Only the flights between these eight airports were considered as it is assumed that HSR would only be capable of substituting air travel within the NEC. Monday, March 28, 2011 was randomly selected to serve as the sample schedule to represent average weekday air travel between the cities of the NEC. Flight schedules with detailed origin and destination, airline, and aircraft type information were obtained from flightaware.com.

There are 485 flights a day between the five major cities in the Northeast megaregion. From the three NYC airports alone, there are 143 flights a day to Boston, Philadelphia, Baltimore and Washington, DC. There are 54 flights a day between LaGuardia and Reagan International.

Aircraft Types Considered The specific aircraft used for each of the 485 flights up and down the NEC was noted. The list of aircraft types used for these flights is below: Boeing 737-300/400/500/700/800 Boeing 717-200 Boeing 757-200 Airbus A319 Airbus A320 Bombardier Dash 8-200/400 Saab 340

Embraer ERJ-135 Embraer ERJ-145 Embraer ERJ-170 Embraer ERJ-190 Canadair CRJ-200 Canadair CRJ-700 Canadair CRJ-900

For the purposes of emissions calculations, these aircraft types were placed into 236

APPENDIX

three general aircraft categories: Narrow-body jets (NB), Regional Jets (RJ), and Turbo Props (TP). The break down is as follows: All Boeing and Airbus aircraft were considered Narrow-body jets. All Embraer and Canadair aircraft were considered Regional Jets. The Bombardier Dash 8 and Saab 340 were considered Turbo Props.

Of the 485 flights, 52% are regional jets, 32% are narrow-body jets and 16% are turbo props. This means that 68% of the flights between the major cities in the NEC are operated by aircraft with an average seating capacity of less than 70 seats.

Therefore, the types of aircraft that HSR is best positioned to substitute are the very aircraft types that are the most environmentally unfriendly on a per passenger basis and represent the most inefficient utilization of scarce runway and airspace in the crowded skies and airfields of the NEC.

Calculations of Carbon Monoxide and Nitric Oxide Emissions CO and NOx emissions were calculated based on factors obtained from a 2006 emissions inventory performed for commercial operations at Raleigh-Durham International Airport.1 This particular study was used because of the detailed information associated with specific aircraft types that are similarly used for NEC service. The categorical breakdown for NB, RJ and TP aircraft in the Raleigh study is identical to the one adopted in this analysis.

This analysis focuses on CO and NOx emissions because those were the emissions reported in the Raleigh study.

Emission factors in the Raleigh study were only given for the landing and takeoff (LTO) sequence. The LTO sequence refers to that segment of flight operations that includes taxi out, takeoff, climbout, approach, and taxi in.2 In short, LTO emissions are generally those emissions emitted below 3,000 ft. Above 3,000 ft, the aircraft enters what is considered its “cruise� phase, and emission factors at that altitude and operation mode are calculated separately.

Because emission factors for the cruise phase were not reported in the Raleigh study, and because no apparent data was available for cruise emission rates by aircraft type for all of the aircraft types flown in the NEC, an average cruise emission factor was used as a substitute. The average cruise emission factor was then added to the LTO factor of each aircraft type category to arrive at the total emissions produced per flight per category.

LTO emissions In the Raleigh study, there were 1,645 turbo prop flights, 42,020 regional jet flights, and 30,782 narrow-body flights.3 The study reported the total tons of CO and NOx emissions per type category.4 This analysis converted those findings to pounds and divided the total number of emissions by the number of type category flights to arrive at the amount of emissions per LTO sequence. The findings are in the table below:

237

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

Per LTO Turbo Prop Regional Jet Narrow-Body Jet

CO lbs 10.9 9.3 19.6

NOx lbs 1.2 5.4 23.0

Cruise Emissions Cruise emission data was not calculated in the Raleigh study and was not readily available due to a number of variables including distance flown, engine type, cruising altitude, and weather and traffic delays. This analysis therefore took the average cruise emission factor of a Boeing 737-400 flying 125 nautical miles as reported by the European Environment Agency and applied that average to each LTO of each type category.

The European Environment Agency published the Emission Inventory Guidebook (2006) containing extensive research on aircraft emissions making it a respectable authority on the subject. The Boeing 737-400 was deemed an appropriate aircraft to assume as an average because while it is a narrow-body jet where one would expect better emission per passenger counts than regional jets or turboprops, it is an older model aircraft that is less fuel-efficient than its modern counterparts.

The average flight in the NEC travels 125 nautical miles5, which is the same distance calculated for the model Boeing 737-400 cruise emissions.

The average cruise emissions for a Boeing 737-400 flying 125 nautical miles6 is in the table below:

Average cruise Boeing 737-400 (125 nm)

CO lbs 5.3

NOx lbs 20.9

The type specific LTO data was added to the average cruise emissions data in order to arrive at a total figure for emissions per flight. The results are in the table below:

Emissions per flight Turbo Prop Regional Jet Narrow-Body Jet

CO lbs 16.3 14.7 24.9

NOx lbs 22.1 26.3 43.9

Total CO and NOx emissions for the NEC were calculated by multiplying the average emissions per flight in each type category by the total number of flights

238

APPENDIX

in each type category.

Type category Turbo Prop Regional Jet Narrow-Body Jet

CO emissions per flight 16.3 lbs 14.7 lbs 24.9 lbs

Number of flights 79 251 155

Total CO emissions in NEC 1,287.7 lbs 3,689.7 lbs 3,859.5 lbs

Total

8836.9 lbs

Type category

NOx emissions Number per flight of flights 79 251 155

Total NOx emissions in NEC 1,745.9 lbs 6,601.3 lbs 6,804.5 lbs

Turbo Prop Regional Jet Narrow-Body Jet

22.1 26.3 43.9

Total

15,151.7 lbs

Despite the use of average cruise emission data for a Boeing 737-400 across all type categories, there is significant variation among the pollutant levels. The average turboprop flight in the NEC emits 16.3 lbs of carbon monoxide and 22.1 lbs of nitric oxide while the average narrow-body jet in the NEC emits an average of 24.9 lbs and 43.9 lbs respectively. This would seem to indicate that turbo props and regional jets are more environmentally friendly than narrow-body jets. On a per passenger basis, however, the data reveals a very different story.

Per Passenger Emissions by Type Category The average seating capacity of the various aircraft types used for each flight on each route was noted from the flight schedule obtained from flightaware.com. A weighted average was then taken for each aircraft type category. The results are in the table below:

Type category Turbo Prop Regional Jet Narrow-Body Jet

Average seat capacity 44 77 132

Since few flights operate at full capacity, an average load factor of 80% was assumed for all flights in each type category. An 80% load factor was assumed because that was the load factor used in a 2008 Union of Concerned Scientists (UCS) study7 upon which much of the studio’s carbon dioxide calculations rely.

There is reason to believe that the average load factors on flights in the NEC may be less than 80%, as load factors can tend to be for short-haul flights. The reason for lower load factors are many, but one is the fact that in typical short-haul markets, there are many flights offered throughout the day. With such high frequencies, the load factors on each flight can tend to be lower. A good example would 239

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

be LGA-DCA, where two dozen flights are offered between those two airports every day.

If an average load factor of 80% is assumed, then the average number of passengers carried per flight in each type category is indicated in the table below:

Type category Turbo Prop Regional Jet Narrow-Body Jet

Average passenger load 36 62 106

When the total number of emissions per flight is divided by the number of passengers carried per flight, then the average emissions per passenger can be obtained. The results are in the table below:

Emissions per passenger Turbo Prop Regional Jet Narrow-Body Jet

CO lbs 0.458 0.237 0.236

NOx lbs 0.621 0.424 0.415

As the data above shows, on a per-passenger carried basis, narrow-body jets are more environmentally friendly for routes within the NEC than both regional jets and turbo props. Since nearly 70% of all flights operated between cities in the NEC are turbo props and regional jets, HSR has the potential to substitute a significant amount of the most environmentally unfriendly aircraft in the NEC.

Carbon Emissions So far, only emission levels for carbon monoxide and nitric oxide have been discussed. The Raleigh study did not consider carbon dioxide emissions in its analysis. Data for carbon dioxide emissions was taken from a 2008 report entitled “Getting There Greener: The Guide to Your Lower-Carbon Vacation” published by the Union of Concerned Scientists (UCS). The report was used because it likewise divided aircraft into the three main type categories: narrow-body jets, regional jets and turbo props just as the Raleigh study had done.

UCS assumed an average load factor of 80 percent for all type categories Since the report did not provide emission information for all trip distances8, the studio performed a linear regression analysis to find the average carbon emissions per passenger per flight type.

Linear Regression Analysis 1. For carbon emissions, the studio used the data from the UCS report, “Getting There Greener.”

2. The studio then found the weighted average distance flown for each category based on schedule information obtained from flightaware.com and airport city-pair distance information from the International Air Trans-

240

APPENDIX

3.

4.

5.

6.

portation Association (IATA). For NB it was 149 nautical miles, for RJ it was 125 nm, for TP it was 81 nm.

Since the UCS chart does not have a pound of carbon dioxide per mile statistic, the studio had to find that on our own. The studio assumed a linear relationship between distance flown and carbon emissions. In reality, the relationship is not completely linear because of numerous factors such as the additional fuel needed to fly longer distance flights. However, for the segment of flight distances the studio are concerned with in this project and for the data presented in this chart, the studio assumed a linear relationship.

The studio found the slope for NB and RJ. For NB the studio found the slope based on data reported for emissions for flights of 1500 and 500 miles. For RJ the studio found the slope based on data reported for emissions for flights of 500 and 250 miles. For TP, since only one set of data for a distance of 250 miles was available, the studio assumed the same slope as that of RJ. The studio made that assumption based on the fact that the emissions per passenger were identical for best turboprop and best RJ in the 250 mile distance range, and nearly identical for average regional jet and average turboprop at 170lbs and 160lbs respectively.

Finding NB. a. Took change in carbon emissions for average NB for numerator (610-220) = 390 b. Took change in distance flown for denominator (1500-500) = 1000 i. 390/1000 = 0.39 c. linear equation is y = mx + b i. slope = 0.39 ii. need to find the y-intercept (b) iii. so if emissions is x axis and distance is y axis… iv. slope is change in y over change in x 1. (220 – y)/ (500 – 0) = .39 2. y = 25 3. so the y intercept (b) is 25 d. linear equation is y = mx + b i. y = .39(x) + 25 e. to find emissions for average NB flight, must plug in weighted average distance of 149 miles. i. Y = .39(149) + 25 ii. Y = 83.11 f. So the average carbon dioxide emissions per passenger on the average NB flight in the NEC is 83.11lbs/passenger Finding RJ a. Using the average regional jet emission lbs/passenger numbers from the UCS table above… b. Took change in emissions for average RJ for numerator (300170) = 130 c. Took change in distance for average RJ for denominator (500250) = 250 i. Slope = 130/250 = 0.52 ii. Change in emissions over change in distance to zero to find y intercept (at zero)

241

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

iii. (170 – X)/(250-0) = 0.52 iv. –x = 0.52(250 – 0) – 170 v. x = 40 = y intercept = b d. linear equation: y = mx + b i. y = (0.52)x + b ii. y = (0.52)x + 40 e. to find emissions for average RJ flight, must plug in weighted average distance of 125 miles i. y = .52(125) + 40 ii. y = 105 lbs/passenger f. so the average carbon dioxide emissions for the average RJ flight in the NEC is 105 lbs/per passenger 7. Finding TP a. No two sets of numbers were available in the table from UCS to find slope of the line. Only data for flights of 250 miles was given. Since the best average TP and RJ emissions were exactly the same in the 250 mile column, and since the average TP and average RJ emissions were nearly identical at 170 and 160 respectively in the 250 mile column, the studio assumed that the linear relationship for TP and RJ were similar and therefore decided to adopt the RJ slope for TP calculations. b. The slope for TP was therefore said to be 0.52 i. To find out the y intercept, the studio calculated… ii. Change in emissions from 250 miles to no miles over change in distance for 250 miles to no miles…

1. (160 – x)/(250-0) 2. and set that equal to 0.52 which the studio assumed to be the slope 3. (160-x)/(250-0) = 0.52 a. 160-x = .52(250) b. x = 30 = y intercept = b c. linear equation: y = mx + b i. y = (.52)x + 30 d. to find emissions for average TP flight, must plug in average weighted distance of 81 miles i. y = .52(81) + 30 ii. y = 70.12 e. so the average carbon dioxide emissions per passenger for the average TP flight in the NEC is 70.12lbs/per passenger This analysis provided the average carbon dioxide emissions per passenger for each type category for flights in the NEC. The results are in the table below:

Type category Turbo Prop Regional Jet Narrow-Body Jet

242

CO2emissions per passenger 70.12 lbs 105 lbs 83.11 lbs

APPENDIX

To find the total carbon dioxide emissions per type category, it was necessary to multiply the average carbon dioxide emissions per passenger by the average number of passengers per flight (per type category) by the total number of flights in that type category in the NEC. This is done in the table below:

Type category

Average # of Number Total passengers of flights carbon per flight dioxide emissions

Turbo Prop

Average carbon dioxide emissions per passenger 70.12 lbs

36

79

Regional Jet

105 lbs

62

251

Narrow-Body Jet

83.11 lbs

106

155

199,421 lbs 1,634,010 lbs 1,365,497 lbs

Total 3,198,928 lbs As the table above demonstrates, regional jets represent the greatest number of flights in the NEC and have the worst average carbon dioxide emissions per passenger, resulting in the greatest total C02 emissions of the three type categories. Regional jets represent 52% of all flight operations and 52% of all carbon dioxide emissions in the NEC even though they represent only 43% of the total seat capacity offered.

The total carbon dioxide emissions from short-haul flights on an average weekday in the NEC is 3,198,928 lbs.

Total NEC Emissions Here is a side-by-side comparison of all three pollutants emitted by the three type categories in the aggregate and on a per passenger basis.

Emissions per passenger

CO lbs

NOx lbs

CO2 lbs

Turbo Prop Regional Jet Narrow-Body Jet

0.488 0.253 0.252

0.662 0.453 0.442

78.36 lbs 116.96 lbs 90.91 lbs

Total emissions

CO lbs

NOx lbs

CO2 lbs

Turbo Prop Regional Jet

1286.28 lbs 3461.65 lbs

1744.28 lbs 199,421 lbs 6204.37 lbs 1,634,010 lbs 243

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

Narrow-Body Jet

3494.54 lbs

6140.98 lbs 1,365,497 lbs

Total

8,242 lbs

14,090 lbs

3,198,928 lbs

If HSR were to be successful in substituting all short-haul flights between the cities of Boston, New York, Philadelphia, Baltimore and Washington, DC, then every day the Northeast megaregion would save more than eight thousand lbs of carbon monoxide emissions, more than fourteen thousand pounds of nitric oxide emissions and more than three million pounds of carbon dioxide emissions.

The above data was for emissions at 2011 passenger levels. But what emissions savings will there be two decades from now when HSR will be online? Ridership data obtained from 2001 Amtrak Survey of current travel between Northeast city pairs was used to obtain a modal split for future years. A total number of passengers diverted from air to HSR was thus obtained. The percentage of passengers currently carried in the Northeast by aircraft type category was found and then applied to that number of diverted air passengers to arrive at a breakdown of substituted flights.

Once the total number of passengers that would be substituted from turboprops was known, that number was divided by the average number of passengers per that type category flight in order to get the total number of flights substituted from that category. The total number of substituted flights for each category was then multiplied by the associated emissions factors to arrive at the emissions saved from air diversion to rail. Those totals were multiplied by the published costs of pollutants per ton to arrive at the savings figures detailed in the BCA appendix.

Sources: 1. Brandon Graver and Christopher Frey, “Estimation of Air Carrier Emissions at Raleigh-Durham International Airport,” Paper 2009-A-486-AWMA (Detroit: Air & Waste Management Association, June 2009).

2. “Air Traffic” in Emission Inventory Guidebook (Copenhagen: European Environment Agency, December 2006), B851-4.

3. Graver and Frey, 11.

4. Ibid.

5. Average distance for flights scheduled on Monday, March 28, 2011 as reported by FlightAware.

6. Data Source: “Air Traffic,” B851-24 7. Union of Concerned Scientists, “Getting There Greener: The Guide to Your Lower-Carbon Vacation,” (Cambridge, MA: December 2008), 38.

8. See Table 1 in “Getting There Greener,” 14.

244

APPENDIX

Appendix C-1: Capital Costs California High‐Speed Train Project Preliminary Engineering and Environmental Documentation Cost Elements

Unit

December 8, 2008

Unit Price (2010)

Track Items Double Track Section - Total Double Track Section - At-Grade

mi

$2,069,156

Double Track Section - On Structure

mi

$3,913,116

Double Track Section - In Tunnel or Subway

mi

$3,913,116

Double Track Section - In Trench

mi

$3,913,116

Single Track Section - At Grade

mi

$1,034,578

Single Track Section - On Structure

mi

$1,956,558

Single Track Sections - In Tunnel or Subway

mi

$1,956,558

Single Track Section - In Trench

mi

$1,956,558

Single Track Section - Total

Structures, Tunnels, Walls Standard Structure

mi

$28,613,172

High Structure

mi

$34,335,807

Long Span Structure

mi

$78,288,818

Waterway Crossing - Primary

mi

$60,161,568

Waterway Crossing - Secondary (Irrigation/Canal Crossing)

mi

$48,166,418

Twin Single Track Drill & Blast (<6 Miles)

mi

$156,338,292

Twin Single Track TBM (<6 Miles)

mi

$115,554,389

Twin Single Track TBM w/3rd Tube (>6 Miles)

mi

$164,268,495

Double Track Drill & Blast

mi

$174,464,470

Double Track Mined (Soft Soil)

mi

$200,520,852

Seismic Chamber (Drill & Blast/Mined)

ea

$122,729,335

Crossovers

ea

$122,729,335

Cut & Cover Double Track Tunnel

mi

$100,260,426

Trench Short

mi

$103,479,155

Trench Long

mi

$81,820,727

Mechanical & Electrical for Tunnels

mi

$4,023,785

Retaining Walls

mi

$9,166,813

Containment Walls

mi

$3,126,254

Single Track Cut and Cover Subway

mi

$62,662,766

Source: "Making High-Speed Rail Work in the Northeast Megaregion," University of Pennsylvania School of Design, 2010 Studio. All unit capital costs are adapted from the California High-Speed Train Project's Preliminary Engineering and Environmental Documentation. Unit costs are adjusted to reflect 2010 dollars and Northeast prices. \\design\home\grad\CPLN\rwetzler\Desktop\Finance SpreadsheetsV2.xlsx

245

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

Cost Elements Grade Separations Street Overcrossing HSR - (Urban) Street Overcrossing HSR - (Suburban) Street Overcrossing HSR - (Undeveloped) Street Undercrossing HSR - (Urban) Street Undercrossing HSR - (Suburban) Street Undercrossing HSR - (Undeveloped) Minor crossing closures Building Items Stations Right of Way Items Right-of-Way Required for Each Segment Dense Urban Urban Dense Suburban Suburban Undeveloped Right-of-Way Required for Passenger Station & Parking Facilities Dense Urban Urban Dense Suburban Suburban Undeveloped System Elements Signaling (ATC) Communications (w/Fiber Optic Backbone) Wayside Protection System Electrification Items Traction Power Supply Traction Power Distribution Rail Junctions Trainset

Unit

Unit Price (2010)

ea ea ea ea ea ea ea

$22,224,251 $8,395,828 $1,415,767 $23,211,996 $8,889,700 $1,498,079 $230,474

ea

$25,000,000 $5,000,000,000

acres acres acres acres acres

$2,151,308 $1,434,205 $717,103 $250,986 $179,276

acres acres acres acres acres

$2,151,308 $1,434,205 $717,103 $250,986 $179,276

mi mi mi

$1,761,830 $1,457,152 $139,887

mi mi

$900,785 $1,679,699

ea

$50,000,000 $1,000,000,000

ea

$40,000,000

Vehicle Costs Trainset Overhead/Project Management 18% of capital costs Environmental Mitigation 3% of capital costs Source: University of Pennsylvania School of Design 2010 Studio

Appendix C-2: Rolling Stock Total Rolling Stock Needs with Reserves (15%) Incremental Roling Stock Cost ($ million)

246

2020 14 560

2025 41 1080

2035 81 1600

2040 91 400

2045 103 480

Washington

130,876 770,631 81,974 157,683 30,989 243,603 2,453,338 462,087 113,471 128,274 21,069 186,524 96,469 80,271 47,198 527,764 5,532,219

Origin MSA

Washington Baltimore Wilmington Philadelphia Trenton Bergen-Passaic Jersey City Newark, NJ New York Nassau-Suffolk Stamford New Haven New London Hartford Providence Worcester Springfield Boston Total

130,876 47,489 17,441 17,113 10,030 32,205 206,693 49,459 18,485 20,372 7,902 23,403 10,549 9,526 7,722 57,519 666,785

770,631 241,681 59,165 15,859 127,512 1,204,666 242,052 61,042 80,033 22,850 116,828 71,375 64,819 34,124 415,578 3,528,214

Wilmington Philadelphia 81,974 34,715 17,441 111,478 33,743 14,652 18,829 10,439 20,508 10,637 11,856 8,476 40,308 415,056

Trenton 157,683 51,376 17,113 59,165 9,767 4,797 31,501 8,590 24,978 16,232 18,138 8,287 88,920 496,545

30,989 15,275 10,030 15,859 1,771 2,034 9,218 7,374 11,611 7,190 9,828 5,205 19,503 145,887

243,603 83,235 32,205 127,512 48,334 14,890 33,733 14,935 45,232 26,160 29,051 14,000 136,917 849,806

Bergen-Passaic Jersey City Newark, NJ 2,453,338 762,440 206,693 1,204,666 111,478 364,165 219,228 54,698 345,660 202,742 203,748 80,074 1,354,726 7,563,655

Destination New York 462,087 149,799 49,459 242,052 33,743 9,767 1,771 48,334 364,165 29,948 49,662 18,455 74,669 42,414 47,574 18,767 259,041 1,901,705

113,471 40,230 18,485 61,042 14,652 4,797 2,034 14,890 29,948 8,210 20,467 13,033 17,785 6,121 65,268 430,431

128,274 43,920 20,372 80,033 18,829 31,501 9,218 33,733 219,228 49,662 23,604 28,455 23,802 19,217 84,666 814,515

21,069 6,916 7,902 22,850 10,439 8,590 7,374 14,935 54,698 18,455 8,210 3,711 8,254 3,391 1,605 15,655 214,054

Nassau-Suffolk Stamford New Haven New London 186,524 60,951 23,403 116,828 20,508 24,978 11,611 45,232 345,660 74,669 20,467 23,604 3,711 7,789 27,612 122,951 1,116,495

Hartford

96,469 29,501 10,549 71,375 10,637 16,232 7,190 26,160 202,742 42,414 13,033 28,455 8,254 7,789 1,681 1,947 44,698 619,127

80,271 22,755 9,526 64,819 11,856 18,138 9,828 29,051 203,748 47,574 17,785 23,802 3,391 27,612 1,681 59,621 631,457

47,198 14,410 7,722 34,124 8,476 8,287 5,205 14,000 80,074 18,767 6,121 19,217 1,605 1,947 21,283 288,435

Providence Worcester Springfield

527,764 185,659 57,519 415,578 40,308 88,920 19,503 136,917 1,354,726 259,041 65,268 84,666 15,655 122,951 44,698 59,621 21,283 3,500,076

Boston

5,532,219 1,790,352 666,785 3,528,214 415,056 496,545 145,887 849,806 7,563,655 1,901,705 430,431 814,515 214,054 1,116,495 619,127 631,457 288,435 3,500,076 30,504,815

Total

Appendix C-3: HSR Ridership

47,489 241,681 34,715 51,376 15,275 83,235 762,440 149,799 40,230 43,920 6,916 60,951 29,501 22,755 14,410 185,659 1,790,352

Baltimore

2035 HSR Ridership Forecast for Capture of Existing Intercity Trips

APPENDIX

247

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y 2035 HSR Ridership Forecast for Long-Distance Commuters Station Baltimore Boston BWI Airport Cornwell's Heights EWR Airport Hartford JFK Airport Metropark Nassau New Carrollton New Haven New London Newark, DE Newark, NJ New York Philadelphia PHL Airport Providence Riverside Ronkonkoma Stamford Suffolk Trenton Washington Wilmington Worcester Total

CBD Jobs 2035 196,768 657,437 114,351 78,104 53,393 44,750 126,488 84,898 107,765 112,979 97,460 29,465 88,625 73,752 1,854,496 346,185 71,965 128,293 111,044 55,039 78,065 135,862 89,131 339,898 74,107 26,618 5,176,938

Total Trips Generated 98,384,000 328,718,500 57,175,500 39,052,000 26,696,500 22,375,000 63,244,000 42,449,000 53,882,500 56,489,500 48,730,000 14,732,500 44,312,500 36,876,000 927,248,000 173,092,500 35,982,500 64,146,500 55,522,000 27,519,500 39,032,500 67,931,000 44,565,500 169,949,000 37,053,500 13,309,000 2,588,469,000

Working Age Population 1-hour Auto 2,846,291 3,044,481 2,782,254 3,576,378 8,993,074 2,088,734 8,906,009 8,834,251 8,235,034 2,738,811 2,153,638 1,080,527 1,795,800 9,153,567 9,235,548 2,552,489 2,552,489 2,825,237 3,049,487 6,263,875 8,461,112 7,671,603 3,576,378 2,705,566 1,528,600 3,204,156

Working Age Population 1-hour HSR 4,605,904 4,359,485 4,416,277 12,923,144 12,104,976 10,848,776 11,986,457 12,091,062 11,730,782 3,913,073 11,477,296 1,798,631 10,954,391 12,107,207 12,096,746 13,094,363 12,966,136 7,918,391 4,436,853 11,183,091 10,531,394 11,452,143 12,618,981 3,767,932 11,998,107 5,005,656

HSR-Only Coverage Percentage 38% 30% 37% 72% 26% 81% 26% 27% 30% 30% 81% 40% 84% 24% 24% 81% 80% 64% 31% 44% 20% 33% 72% 28% 87% 36%

HSR Trips 93,965 247,888 52,887 70,612 17,158 45,168 40,633 28,585 40,142 42,379 98,965 14,705 92,620 22,490 548,296 348,379 72,248 103,148 43,403 30,263 19,183 56,063 79,838 119,793 80,832 11,975 2,421,618

Assumption: HSR captures 0.25% of HSR-only coverage commuter trips, which are the employees with low price elasticity and high location specificity.

2035 HSR Ridership Forecast for Knowledge-Industry Employees Station Baltimore Boston BWI Airport Cornwell's Heights EWR Airport Hartford JFK Airport Metropark Nassau New Carrollton New Haven New London Newark, DE New York Philadelphia PHL Airport Providence Riverside Ronkonkoma Stamford Suffolk Trenton Washington Wilmington Worcester Total

Knowledge Employees Total Trips Generated Knowledge Employees 2-hour Auto Knowledge Employees 2-hour HSR HSR-Only Coverage Percentage HSR Trips 64,084 208,949 34,630 27,114 48,563 29,225 49,232 34,426 31,941 23,060 21,493 17,076 63,647 874,268 168,514 11,751 44,741 68,244 23,664 27,372 48,609 45,398 192,823 51,306 3,239 2,213,363

1,281,670 4,178,980 692,600 542,280 971,260 584,490 984,630 688,510 638,810 461,200 429,850 341,520 1,272,930 17,485,360 3,370,270 235,010 894,820 1,364,880 473,280 547,430 972,170 907,960 3,856,460 1,026,120 64,770 44,267,260

1,715,578 2,236,708 1,653,418 3,354,440 3,163,193 4,773,723 3,910,585 3,002,419 3,905,566 1,447,518 4,181,361 4,438,068 2,471,627 2,606,233 3,928,688 3,846,386 4,138,345 2,371,447 3,580,160 3,606,768 3,789,495 3,090,111 1,425,549 3,642,279 2,490,820

6,156,690 6,763,379 5,912,824 5,812,635 5,452,720 7,137,188 6,975,807 5,275,803 7,187,474 5,700,247 7,156,368 7,185,234 6,271,663 4,466,882 6,823,819 6,696,720 6,893,598 7,052,321 7,163,897 6,186,890 7,182,060 5,341,986 5,732,428 6,356,444 7,131,409

Assumption: An average knowledge employee makes 10 trips per year (20 segments total). HSR captures one out of every six HSR-only coverage knowledge-industry trips.

248

72% 67% 72% 42% 42% 33% 44% 43% 46% 75% 42% 38% 61% 42% 42% 43% 40% 66% 50% 42% 47% 42% 75% 43% 65%

154,088 466,159 83,154 38,222 67,970 32,259 72,109 49,447 48,615 57,347 29,782 21,763 128,546 1,213,901 238,316 16,671 59,607 150,986 39,460 38,049 76,537 63,791 482,905 73,025 7,025 3,709,735

APPENDIX

Appendix C-4: Ridership and Financial Model Inputs Assumptions for Ridership and Financial Analysis Model for 2035 Ridership Model Inputs Gas Price Average auto fuel efficiency Tolls per mile Traffic Congestion Relative to Today Air Ticket Price Universal Air Travel + Access Time Population growth relative to trend HSR Ticket Price relative to Acela HSR Universal Access Time Jersey City Access Penalty Bergen-Passaic Access Penalty Springfield Access Penalty

Average Fare Structure Miles^2 Miles Constant

Factor

Unit $4 /gallon 22 mpg $0.067 /mile 100% $90 180 minutes 100% 90% 15 minutes 15 minutes 20 minutes 25 minutes

Factor (2035 $) -0.00104 0.79473 25.18

Average Knowledge Industry Trip Distance Average Long-Distance Commuter Trip Distance

Inflation and Changes in Conditions Over Time Ticket Price Increase Gas Price Inflation Air Ticket Inflation Electricity and Operating Costs Increase Highway Congestion Increase/Decrease

225 miles 112.5 miles

Annual 1% 2% 2% 1% 0

Total Travel Demand Regression Results Constant Population City 1*Population City 2 Distance^2.5

Car Travel Time Constant Distance

Operating Costs Inputs Labor Cost Non-Labor Operations and Maintenance Cost Train Load Factors

Other Revenue Sources On-board Food and Beverage Sales On-board Advertising Revenue Passenger Facility Charge Station Asset Management - Retail Leasing and Parking ROW Leasing for Electricity Transmission Lines ROW Leasing for Pipelines ROW Leasing for Fiber Optic Capacity Cell Phone Tower Revenue ($ per year) Cost to Build Cell Phone Tower Annual Revenue from Self-Built Cell Phone Towers Sale of electricity back into grid

Factor 63012 4.24E-08 -0.044389673

Factor (Minutes) 11 1.12

Factor

Unit $0.05 /seat mile $0.10 /seat mile 70%

Per Unit

Unit 10% of revenue $4.54 rider $2.50 rider 5% of revenue $25,000 mile $1,200 mile $25,000 mile $18,000 tower per year $150,000 per tower (one time) $100,000 per tower per year $87,871 year

249

250

Origin MSA Washington Baltimore Wilmington Philadelphia Trenton Bergen-Passaic Jersey City Newark, NJ New York Nassau-Suffolk Stamford New Haven New London Hartford Providence Worcester Springfield Boston

Destination Washington Baltimore Wilmington Philadelphia Trenton Bergen-Passaic Jersey City Newark, NJ New York Nassau-Suffolk Stamford New Haven New London $86 $98 $110 $133 $128 $128 $129 $135 $139 $147 $151 $66 $79 $93 $122 $116 $115 $116 $124 $129 $141 $147 $86 $66 $56 $94 $86 $84 $86 $96 $104 $122 $133 $98 $79 $82 $73 $71 $74 $85 $94 $113 $126 $110 $93 $56 $57 $70 $80 $102 $117 $133 $122 $94 $82 $47 $58 $83 $101 $128 $116 $86 $73 $37 $49 $75 $95 $128 $115 $84 $71 $39 $51 $77 $96 $129 $116 $86 $74 $57 $36 $75 $94 $135 $124 $96 $85 $70 $47 $37 $39 $36 $61 $64 $84 $139 $129 $104 $94 $80 $58 $49 $51 $61 $74 $147 $141 $122 $113 $102 $83 $75 $77 $75 $64 $151 $147 $133 $126 $117 $101 $95 $96 $94 $84 $74 $151 $147 $133 $126 $116 $100 $94 $95 $93 $83 $73 $46 $52 $151 $152 $145 $141 $134 $122 $117 $118 $117 $109 $101 $79 $57 $152 $152 $144 $140 $133 $121 $116 $117 $116 $108 $99 $77 $67 $152 $149 $138 $132 $123 $109 $102 $104 $102 $93 $83 $58 $66 $148 $151 $150 $147 $143 $134 $130 $131 $130 $124 $117 $98 $80

Average Fares by MSA-pair in 2011 $

Hartford Providence Worcester Springfield Boston $151 $151 $152 $152 $148 $147 $152 $152 $149 $151 $133 $145 $144 $138 $150 $126 $141 $140 $132 $147 $116 $134 $133 $123 $143 $100 $122 $121 $109 $134 $94 $117 $116 $102 $130 $95 $118 $117 $104 $131 $93 $117 $116 $102 $130 $83 $109 $108 $93 $124 $73 $101 $99 $83 $117 $46 $79 $77 $58 $98 $52 $57 $67 $66 $80 $75 $61 $82 $75 $47 $73 $52 $61 $47 $49 $73 $76 $82 $52 $49 $76 -

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

Appendix C-5: Fares

Destination Baltimore Wilmington Philadelphia Trenton Bergen-Passaic Jersey City Newark, NJ New York Nassau-Suffolk Stamford New Haven New London Hartford Providence Worcester Springfield Boston Total - $ - $ 13,096,317 $ 87,248,255 $ 10,440,499 $ 24,415,218 $ 4,620,739 $ 36,083,064 $ 366,967,146 $ 72,268,275 $ 18,316,787 $ 21,909,476 $ 3,689,890 $ 32,636,058 $ 16,955,056 $ 14,118,686 $ 8,309,120 $ 90,804,123 $ 821,878,708 3,637,342 22,167,445 3,757,754 7,277,226 2,053,871 11,089,869 102,960,461 21,516,046 6,041,545 7,174,427 1,181,651 10,392,721 5,192,792 4,002,882 2,496,323 32,610,334 243,552,690 13,096,317 3,637,342 1,130,882 1,867,842 995,712 3,143,876 20,682,997 5,535,791 2,241,541 2,880,987 1,223,127 3,605,938 1,775,353 1,597,938 1,234,210 10,010,241 74,660,094 87,248,255 22,167,445 5,656,210 1,344,937 10,584,273 103,206,204 23,878,148 6,649,641 10,522,673 3,355,312 17,059,905 11,649,219 10,533,047 5,214,654 71,081,156 390,151,079 10,440,499 3,757,754 1,130,882 7,440,369 2,735,248 1,355,208 2,219,917 1,416,154 2,762,561 1,653,650 1,832,558 1,209,843 6,683,189 44,637,829 24,415,218 7,277,226 1,867,842 5,656,210 529,597 322,405 3,040,645 1,009,757 2,907,676 2,305,294 2,555,246 1,045,309 13,852,369 66,784,791 4,620,739 2,053,871 995,712 1,344,937 76,392 115,342 806,679 809,486 1,260,583 978,131 1,324,690 618,996 2,946,742 17,952,300 36,083,064 11,089,869 3,143,876 10,584,273 2,188,586 874,811 3,011,250 1,662,337 4,979,953 3,589,485 3,950,626 1,684,814 20,814,987 103,657,931 366,967,146 102,960,461 20,682,997 103,206,204 7,440,369 15,323,915 18,996,984 5,964,430 37,268,116 27,462,356 27,344,175 9,468,521 204,072,332 947,158,005 72,268,275 21,516,046 5,535,791 23,878,148 2,735,248 529,597 76,392 2,188,586 15,323,915 2,119,272 3,677,925 1,810,062 7,224,751 5,378,985 5,967,984 2,027,390 37,225,970 209,484,336 18,316,787 6,041,545 2,241,541 6,649,641 1,355,208 322,405 115,342 874,811 2,119,272 704,369 1,726,866 1,524,346 2,053,410 590,845 8,851,622 53,488,010 21,909,476 7,174,427 2,880,987 10,522,673 2,219,917 3,040,645 806,679 3,011,250 18,996,984 3,677,925 1,252,892 2,599,814 2,131,899 1,291,703 9,654,947 91,172,218 3,689,890 1,181,651 1,223,127 3,355,312 1,416,154 1,009,757 809,486 1,662,337 5,964,430 1,810,062 704,369 222,435 548,114 262,553 122,240 1,447,036 25,428,952 32,636,058 10,392,721 3,605,938 17,059,905 2,762,561 2,907,676 1,260,583 4,979,953 37,268,116 7,224,751 1,726,866 1,252,892 222,435 675,384 1,966,758 11,725,558 137,668,154 16,955,056 5,192,792 1,775,353 11,649,219 1,653,650 2,305,294 978,131 3,589,485 27,462,356 5,378,985 1,524,346 2,599,814 548,114 675,384 92,252 165,099 2,676,130 85,221,460 14,118,686 4,002,882 1,597,938 10,533,047 1,832,558 2,555,246 1,324,690 3,950,626 27,344,175 5,967,984 2,053,410 2,131,899 262,553 1,966,758 92,252 3,372,786 83,107,490 8,309,120 2,496,323 1,234,210 5,214,654 1,209,843 1,045,309 618,996 1,684,814 9,468,521 2,027,390 590,845 1,291,703 122,240 165,099 1,875,407 37,354,474 90,804,123 32,610,334 10,010,241 71,081,156 6,683,189 13,852,369 2,946,742 20,814,987 204,072,332 37,225,970 8,851,622 9,654,947 1,447,036 11,725,558 2,676,130 3,372,786 1,875,407 529,704,927 $ 821,878,708 $ 243,552,690 $ 74,660,094 $ 390,151,079 $ 44,637,829 $ 66,784,791 $ 17,952,300 $ 103,657,931 $ 947,158,005 $ 209,484,336 $ 53,488,010 $ 91,172,218 $ 25,428,952 $ 137,668,154 $ 85,221,460 $ 83,107,490 $ 37,354,474 $ 529,704,927 $ 3,963,063,448

Long-distance Commuters Knowledge Industry Employees $ 9,524,224 $ 15,618,245 25,125,741 47,249,486 5,360,616 8,428,458 7,157,137 3,874,168 1,739,078 6,889,372 4,578,164 3,269,720 4,118,558 7,308,902 2,897,333 5,011,942 4,068,776 4,927,576 4,295,539 5,812,660 10,031,041 3,018,727 1,490,475 2,205,828 9,387,923 13,029,302 55,574,824 123,039,973 35,311,367 24,155,549 7,322,957 1,689,785 10,455,039 6,041,749 4,399,304 15,303,856 3,067,449 3,999,600 1,944,343 3,856,631 5,682,480 7,757,700 8,092,278 6,465,762 12,142,065 48,946,819 8,193,050 7,401,703 1,213,728 712,005 $ 245,453,097 $ 376,015,518

Washington

Revenues by Station for Long-distance Commuters and Knowledge Industry Employees for 2035

$

Appendix C-6: Revenue

Origin MSA Washington Baltimore Wilmington Philadelphia Trenton Bergen-Passaic Jersey City Newark, NJ New York Nassau-Suffolk Stamford New Haven New London Hartford Providence Worcester Springfield Boston Total

Station Baltimore Boston BWI Airport Cornwell's Heights EWR Airport Hartford JFK Airport Metropark Nassau New Carrollton New Haven New London Newark, DE New York Philadelphia PHL Airport Providence Riverside Ronkonkoma Stamford Suffolk Trenton Washington Wilmington Worcester Total

Revenues by MSA-Pair from Capture of Forecasted Inter-city Travel for 2035

APPENDIX

251

252

Origin Destination MSA Washington Baltimore Wilmington Philadelphia Trenton Bergen-Passaic Jersey City Newark, NJ New York Nassau-Suffolk Stamford New Haven New London Hartford Providence Worcester Springfield Boston Washington 0% 0% 24% 24% 24% 18% 19% 25% 25% 25% 22% 24% 21% 23% 16% 20% 16% 16% Baltimore 0% 0% 22% 23% 24% 17% 18% 24% 24% 25% 22% 25% 22% 24% 18% 22% 17% 20% Wilmington 24% 22% 0% 0% 20% 14% 15% 24% 24% 24% 20% 25% 22% 25% 19% 24% 17% 23% Philadelphia 24% 23% 0% 0% 0% 12% 12% 23% 23% 24% 19% 24% 22% 25% 19% 25% 17% 24% Trenton 24% 24% 20% 0% 0% 0% 0% 0% 21% 23% 18% 24% 21% 24% 19% 25% 16% 25% Bergen-Passaic 18% 17% 14% 12% 0% 0% 0% 0% 0% 3% 4% 24% 12% 15% 12% 17% 9% 18% Jersey City 19% 18% 15% 12% 0% 0% 0% 0% 0% 2% 3% 13% 13% 16% 12% 18% 9% 19% Newark, NJ 25% 24% 24% 23% 0% 0% 0% 0% 0% 14% 10% 23% 20% 24% 17% 24% 13% 25% New York 25% 24% 24% 23% 21% 0% 0% 0% 0% 12% 0% 23% 19% 24% 17% 24% 13% 25% Nassau-Suffolk 25% 25% 24% 24% 23% 3% 2% 14% 12% 0% 14% 22% 18% 24% 16% 24% 12% 25% Stamford 22% 22% 20% 19% 18% 4% 3% 10% 0% 14% 0% 0% 12% 16% 12% 19% 7% 20% New Haven 24% 25% 25% 24% 24% 24% 13% 23% 23% 22% 0% 0% 0% 17% 23% 23% 21% 24% New London 21% 22% 22% 22% 21% 12% 13% 20% 19% 18% 12% 0% 0% 5% 11% 5% 2% 12% Hartford 23% 24% 25% 25% 24% 15% 16% 24% 24% 24% 16% 17% 5% 0% 5% 21% 0% 24% Providence 16% 18% 19% 19% 19% 12% 12% 17% 17% 16% 12% 23% 11% 5% 0% 1% 2% 10% Worcester 20% 22% 24% 25% 25% 17% 18% 24% 24% 24% 19% 23% 5% 21% 1% 0% 0% 18% Springfield 16% 17% 17% 17% 16% 9% 9% 13% 13% 12% 7% 21% 2% 0% 2% 0% 0% 9% Boston 16% 20% 23% 24% 25% 18% 19% 25% 25% 25% 20% 24% 12% 24% 10% 18% 9% 0%

HSR Modal Capture, Percentage HSR Trips for 2035

Origin Destination MSA Washington Baltimore Wilmington Philadelphia Trenton Bergen-Passaic Jersey City Newark, NJ New York Nassau-Suffolk Stamford New Haven New London Hartford Providence Worcester Springfield Boston Washington 0% 0% 0% 1% 2% 8% 6% 6% 6% 9% 11% 20% 29% 28% 43% 42% 33% 53% Baltimore 0% 0% 0% 0% 0% 4% 3% 2% 3% 4% 6% 13% 20% 20% 33% 32% 24% 44% Wilmington 0% 0% 0% 0% 0% 1% 0% 0% 0% 1% 1% 4% 8% 8% 17% 16% 10% 26% Philadelphia 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 1% 2% 5% 5% 13% 12% 7% 20% Trenton 2% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 1% 3% 3% 8% 8% 4% 15% Bergen-Passaic 8% 4% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 1% 1% 4% 4% 2% 8% Jersey City 6% 3% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 1% 0% 3% 3% 1% 7% Newark, NJ 6% 2% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 1% 1% 3% 3% 1% 7% New York 6% 3% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 1% 0% 3% 3% 1% 6% Nassau-Suffolk 9% 4% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 2% 2% 0% 4% Stamford 11% 6% 1% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 1% 1% 0% 3% New Haven 20% 13% 4% 2% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 1% New London 29% 20% 8% 5% 3% 1% 1% 1% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% Hartford 28% 20% 8% 5% 3% 1% 0% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Providence 43% 33% 17% 13% 8% 4% 3% 3% 3% 2% 1% 0% 0% 0% 0% 0% 0% 0% Worcester 42% 32% 16% 12% 8% 4% 3% 3% 3% 2% 1% 0% 0% 0% 0% 0% 0% 0% Springfield 33% 24% 10% 7% 4% 2% 1% 1% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% Boston 53% 44% 26% 20% 15% 8% 7% 7% 6% 4% 3% 1% 0% 0% 0% 0% 0% 0%

Air-Car Modal Split, Percentage Air Travel for 2035

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

Appendix C-7: Modal Split With and Without HSR

APPENDIX

Appendix C-8: Concession Value

Value of Ten-Year Concessions 10-Year Concession Starting in Year: (8%) 2025 2035 2045 2055 Totall 4 426 4,426 6 937 6,937 8 159 8,159 9 147 28,668 9,147 28 668 5 515 5,515 7 219 7,219 8 480 21,213 8,480 21 213 3,560 3,560 3,011 3,011 2,941 2,941 9,512 9,512 4 426 16,011 4,426 16 011 18,388 18 388 20 20,568 568 59,393 59 393

PHL NYC PHL-NYC WAS-PHL WAS PHL NYC BOS NYC-BOS Total Total (2012$*) ( $)

3 421 10,153 3,421 10 153

9 566 9,566

8 778 31,918 8,778 31 918

($ million) *two percent inflation

Value of Concession by Length and Required Return Required IRR 6% 8% 10%

Required IRR 6% 8% 10%

Required IRR 6% 8% 10%

PHL-NYC Length of Concession Starting in 2025 10 15 20 30 4,805 7,065 8,991 11,727 4,426 6,233 7,637 9,386 4,094 5,547 6,577 7,707

WAS-PHL Length of Concession Starting in 2025 10 15 20 30 2,696 4,468 6,113 8,601 2,456 3,874 5,071 6,661 2,248 3,386 4,264 5,291

NYC-BOS Length of Concession Starting in 2025 10 15 20 2,004 3,229 4,143 1,829 2,810 3,477 1,676 2,465 2,955

30 5,145 4,122 3,375

($ million and in real terms)

253

254

Gross Cash Flow

(4,988)

(4,988)

4,988

4,988

4,988

4,988

Operations and Maintenance - HSR Non Labor Operations and Maintenance - HSR Labor Train Operator Return Rolling Stock Rolling Stock Renewal Total Rolling Stock Total Operating and Maintenance Costs Total Expenses

Total Capital Costs

268 720

4,000

268 720

-

-

4,000

-

-

-

-

-

2013

Existing Corridor Upgrades

-

-

-

2012

Environmental Mitigation Overhead

Capital Costs Phase One Construction Phase Two Construction Total Construction

Expenses:

Rolling Stock Leaseback Station Retail Passenger Facility Charges Total Revenues

Train Operations Ticket Revenue Advertising Food and Beverage Total Train Operations

Capital Revenues Utility Leases Electricity Transmission Line ROW Lease Pipeline ROW Lease Fiber Optic Cable ROW Lease Cell Phone Tower Capacity Total Utility Leases

Revenues:

Income Statement: HSR on the NEC ($ million, nominal)

-

-

(3,808)

3,808

3,808

268 540

3,000

-

-

-

2014

-

(6,919)

6,919

6,919

268 1,015

2,000

3,052 585 3,637

-

-

-

2015

(1)

(5,827)

5,825

5,825

268 848

1,000

3,113 597 3,710

-

7 0 7 (16) (1)

2016

(4,445)

4,465

4,465

681

-

3,175 609 3,784

20

-

7 7 6 20

2017

(5,110)

315 315 315 5,169

4,854

740

-

3,492 621 4,113

38 59

-

8 8 6 21

2018

(5,175)

322 322 322 5,272

4,951

755

-

3,562 633 4,195

76 98

-

8 8 6 21

2019

(7,057)

824 389 161 253 253 1,627 9,326

7,699

223 1,140

-

5,690 646 6,336

107 88 40 2,269

1,764 72 176 2,013

8 8 6 22

2020

(7,109)

895 414 174 258 258 1,742 9,590

7,849

223 1,163

-

5,803 659 6,462

138 96 42 2,481

1,913 77 191 2,181

8 8 9 25

2021

(7,166)

966 440 188 263 263 1,857 9,858

8,001

223 1,186

-

5,919 672 6,592

169 103 45 2,692

2,061 82 206 2,349

8 8 9 26

2022

(4,976)

1,037 465 201 269 269 1,972 7,878

5,906

223 867

-

4,131 686 4,816

202 110 48 2,902

2,209 86 221 2,517

8 8 9 26

2023

(4,994)

1,109 490 215 274 274 2,088 8,108

6,020

223 884

-

4,213 699 4,913

234 118 50 3,114

2,358 91 236 2,685

9 9 10 27

2024

(3,413)

1,180 516 228 207 207 2,131 6,731

4,600

223 668

-

3,709 3,709

259 125 53 3,317

2,506 96 251 2,853

9 9 10 27

2025

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

Appendix C-9: Income Statement

(3,117)

Gross Cash Flow

4,464

Total Capital Costs 1,323 566 255 211 211 2,355 6,819

681

Environmental Mitigation Overhead

Operations and Maintenance - HSR Non Labor Operations and Maintenance - HSR Labor Train Operator Return Rolling Stock Rolling Stock Renewal Total Rolling Stock Total Operating and Maintenance Costs Total Expenses

-

Existing Corridor Upgrades

Capital Costs Phase One Construction Phase Two Construction Total Construction 3,783 3,783

285 140 58 3,702

Rolling Stock Leaseback Station Retail Passenger Facility Charges Total Revenues

Expenses:

2,803 105 280 3,188

9 9 13 31

2026

Train Operations Ticket Revenue Advertising Food and Beverage Total Train Operations

Capital Revenues Utility Leases Electricity Transmission Line ROW Lease Pipeline ROW Lease Fiber Optic Cable ROW Lease Cell Phone Tower Capacity Total Utility Leases

Revenues:

(3,048)

1,465 617 282 215 215 2,579 7,133

4,554

695

-

3,859 3,859

310 155 63 4,085

3,099 115 310 3,524

9 9 13 32

2027

(2,981)

1,608 668 309 220 220 2,804 7,449

4,645

709

-

3,936 3,936

337 170 69 4,468

3,396 125 340 3,860

9 9 14 32

2028

(2,914)

1,750 718 336 224 224 3,028 7,766

4,738

723

-

4,015 4,015

364 185 74 4,852

3,693 134 369 4,196

9 9 14 33

2029

(2,850)

1,893 769 363 229 229 3,253 8,085

4,832

737

-

4,095 4,095

391 199 79 5,236

3,990 144 399 4,532

10 10 14 34

2030

(2,786)

2,036 820 389 233 233 3,478 8,407

4,929

752

-

4,177 4,177

419 214 85 5,620

4,286 153 429 4,868

10 10 15 34

2031

(2,724)

2,178 870 416 238 238 3,702 8,730

5,028

767

-

4,261 4,261

448 229 90 6,006

4,583 163 458 5,204

10 10 15 35

2032

(2,664)

2,321 921 443 243 243 3,927 9,056

5,128

782

-

4,346 4,346

477 244 95 6,392

4,880 173 488 5,540

10 10 15 36

2033

(2,605)

2,463 971 470 247 247 4,152 9,383

5,231

798

-

4,433 4,433

506 259 100 6,778

5,176 182 518 5,876

10 10 15 36

2034

2,773

2,606 1,022 497 126 126 4,251 4,377

-

-

-

-

522 274 106 7,150

5,473 192 547 6,212

11 11 16 37

2035

APPENDIX

255

256

537 288 110 7,501

Rolling Stock Leaseback Station Retail Passenger Facility Charges Total Revenues

2,938

-

Total Capital Costs

Gross Cash Flow

-

Environmental Mitigation Overhead

2,735 1,048 522 129 129 4,434 4,563

-

Existing Corridor Upgrades

Operations and Maintenance - HSR Non Labor Operations and Maintenance - HSR Labor Train Operator Return Rolling Stock Rolling Stock Renewal Total Rolling Stock Total Operating and Maintenance Costs Total Expenses

-

Capital Costs Phase One Construction Phase Two Construction Total Construction

Expenses:

5,754 199 575 6,528

11 1 11 16 38

2036

Train Operations Ticket Revenue Advertising Food and Beverage Total Train Operations

Capital Revenues Utility Leases Electricity Transmission Line ROW Lease Pipeline ROW Lease Fiber Optic Cable ROW Lease Cell Phone Tower Capacity Total Utility Leases

Revenues:

3,103

2,864 1,074 548 131 131 4,617 4,748

-

-

-

-

553 302 114 7,851

6,035 206 604 6,845

11 11 16 39

2037

3,268

2,994 1,100 573 134 134 4,800 4,934

-

-

-

-

569 316 118 8,202

6,316 213 632 7,161

11 11 17 39

2038

3,434

3,123 1,126 598 137 137 4,983 5,120

-

-

-

-

585 330 121 8,554

6,597 220 660 7,477

12 12 17 40

2039

3,548

3,252 1,152 623 167 167 5,194 5,361

-

-

-

-

605 344 125 8,909

6,878 228 688 7,793

12 12 17 41

2040

3,738

3,398 1,182 652 170 170 5,403 5,573

-

-

-

-

626 360 130 9,311

7,199 235 720 8,154

12 12 18 42

2041

3,929

3,544 1,212 681 174 174 5,611 5,785

-

-

-

-

647 376 134 9,714

7,520 243 752 8,515

12 12 18 43

2042

4,120

3,690 1,242 710 177 177 5,820 5,997

-

-

-

-

668 392 138 10,117

7,841 250 784 8,875

12 12 18 43

2043

4,311

3,836 1,272 739 181 181 6,028 6,209

-

-

-

-

690 408 142 10,520

8,162 258 816 9,236

13 13 19 44

2044

4,676

3,982 1,302 768 92 92 6,144 6,237

-

-

-

-

701 424 146 10,913

8,483 265 848 9,597

13 13 19 45

2045

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

712 435 149 11,179

Rolling Stock Leaseback Station Retail Passenger Facility Charges Total Revenues

4,807

-

Total Capital Costs

Gross Cash Flow

-

Environmental Mitigation Overhead

4,079 1,318 787 94 94 6,278 6,372

-

Existing Corridor Upgrades

Operations and Maintenance - HSR Non Labor Operations and Maintenance - HSR Labor Train Operator Return Rolling Stock Rolling Stock Renewal Total Rolling Stock Total Operating and Maintenance Costs Total Expenses

-

Capital Costs Phase One Construction Phase Two Construction Total Construction

Expenses:

8,697 270 870 9,837

13 13 20 46

2046

Train Operations Ticket Revenue Advertising Food and Beverage Total Train Operations

Capital Revenues Utility Leases Electricity Transmission Line ROW Lease Pipeline ROW Lease Fiber Optic Cable ROW Lease Cell Phone Tower Capacity Total Utility Leases

Revenues:

4,938

4,177 1,333 806 96 96 6,412 6,508

-

-

-

-

723 446 152 11,445

8,911 275 891 10,077

13 13 20 47

2047

3,926

4,274 1,348 825 98 571 669 7,116 7,785

-

-

-

-

735 456 154 11,712

9,125 280 913 10,318

14 14 20 48

2048

4,035

4,371 1,363 845 100 583 682 7,261 7,944

-

-

-

-

747 467 157 11,978

9,339 285 934 10,558

14 14 21 49

2049

4,414

4,469 1,378 864 102 458 560 7,271 7,831

-

-

-

-

759 478 160 12,245

9,553 290 955 10,799

14 14 21 50

2050

4,528

4,566 1,393 883 104 468 571 7,414 7,985

-

-

-

-

772 488 163 12,513

9,767 295 977 11,039

15 15 22 51

2051

4,641

4,663 1,408 902 106 477 583 7,557 8,140

-

-

-

-

785 499 165 12,780

9,981 300 998 11,279

15 15 22 52

2052

4,754

4,761 1,423 922 108 486 595 7,700 8,295

-

-

-

-

798 510 168 13,048

10,195 305 1,020 11,520

15 15 23 53

2053

4,866

4,858 1,438 941 110 496 606 7,844 8,450

-

-

-

-

811 520 171 13,316

10,409 310 1,041 11,760

16 16 23 54

2054

5,241

4,955 1,453 960 112 375 487 7,856 8,344

-

-

-

-

824 531 174 13,585

10,623 315 1,062 12,001

16 16 23 55

2055

APPENDIX

257

258

838 542 177 13,854

Rolling Stock Leaseback Station Retail Passenger Facility Charges Total Revenues

5,360

-

Total Capital Costs

Gross Cash Flow

-

Environmental Mitigation Overhead

5,053 1,469 979 115 382 497 7,998 8,495

-

Existing Corridor Upgrades

Operations and Maintenance - HSR Non Labor Operations and Maintenance - HSR Labor Train Operator Return Rolling Stock Rolling Stock Renewal Total Rolling Stock Total Operating and Maintenance Costs Total Expenses

-

Capital Costs Phase One Construction Phase Two Construction Total Construction

Expenses:

10,837 320 1,084 12,241

16 1 16 24 57

2056

Train Operations Ticket Revenue Advertising Food and Beverage Total Train Operations

Capital Revenues Utility Leases Electricity Transmission Line ROW Lease Pipeline ROW Lease Fiber Optic Cable ROW Lease Cell Phone Tower Capacity Total Utility Leases

Revenues:

5,476

5,150 1,484 999 117 390 507 8,139 8,646

-

-

-

-

852 553 179 14,123

11,051 325 1,105 12,481

16 16 24 57

2057

5,594

5,247 1,499 1,018 119 398 517 8,281 8,798

-

-

-

-

866 563 182 14,392

11,265 330 1,127 12,722

17 17 25 58

2058

5,711

5,345 1,514 1,037 122 406 528 8,423 8,951

-

-

-

-

881 574 185 14,662

11,479 335 1,148 12,962

17 17 25 60

2059

5,828

5,442 1,529 1,056 124 414 538 8,565 9,103

-

-

-

-

896 585 188 14,932

11,693 340 1,169 13,203

17 17 26 61

2060

5,945

5,539 1,544 1,075 127 422 549 8,708 9,256

-

-

-

-

911 595 190 15,202

11,907 345 1,191 13,443

18 18 26 62

2061

6,062

5,637 1,559 1,095 129 431 560 8,850 9,410

-

-

-

-

927 606 193 15,473

12,121 350 1,212 13,683

18 18 27 63

2062

6,179

5,734 1,574 1,114 132 439 571 8,993 9,564

-

-

-

-

942 617 196 15,744

12,335 355 1,234 13,924

19 19 27 65

2063

6,296

5,831 1,589 1,133 134 448 582 9,136 9,719

-

-

-

-

959 627 199 16,015

12,549 360 1,255 14164

19 19 28 66

2064

6,870

5,929 1,604 1,152 137 229 366 9,051 9,417

-

-

-

-

975 638 201 16,286

12,763 365 1,276 14405

19 19 29 67

2065

HIGH-SPEED RAIL in the NORTHEAST MEGAREGION: From Vision to Realit y

APPENDIX

Appendix D: Presentation to US DOT

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