(The following story by Kurtis Alexander appeared on the Santa Cruz Sentinel website on November 15, 2009.)
SANTA CRUZ, Calif. — For years, transportation planner Luis Mendez has been poring over old county railroad records. The paperwork dates to when trains carried Santa Cruz residents to the San Francisco Bay Area and boxcars sent vast supplies of timber, cement and produce across the state –” a heyday for a 32-mile coastal line that sees little traffic today.
Mendez believes there’s new life to be had for the line. As deputy director of the county’s transportation agency, he’s on the verge of purchasing the railroad from Union Pacific and reshaping its future, perhaps with a public hiking and biking trail along the bluffs of the Pacific and new passenger trains running between Santa Cruz and Watsonville.
But time is short. A grant worth millions that the agency needs to acquire the railroad expires next year.
“We’ve been working on this for a number of years, and we finally have a deal…. We plan to move,” said Mendez, who has not said what exactly will happen to the line after the proposed $14 million sale, only that he hopes to close the deal by December. The purchase includes the tracks from Davenport to Watsonville, along with adjacent property.
Critics of the purchase fear a classic government boondoggle. With talk of a trail and trains, watchdogs and business leaders are expressing concern about moving forward with the sale before the long-term commitment of public funds is clear, especially at a time when government budgets are tight. Some even want the deal called off.
A Sentinel examination of the acquisition finds that while future costs are uncertain, proceeding with at least part of the venture could be worthwhile. The county transportation agency can tap state and federal money to buy the line and construct much of the proposed rail trail, meaning a portion of the railroad vision could be achieved at relatively little expense to the community.
Running passenger trains, however, is a different story. Commuter service on the line does not appear economical, at least at this time.
“Passenger rail, I think, is the least compelling reason to buy the corridor,” said Les White, one of dozens of transportation professionals interviewed for this story and head of the county’s bus district. “But to put the trail in place does not require huge capital investments.”
While a trail built next to the tracks would not solve the county’s transportation woes, such as traffic on Highway 1, it would offer residents and visitors a car-free choice of walking or pedaling through city centers, as well as to popular state parks and beaches. Having the rail corridor in public ownership also leaves the transportation agency with future options, should it choose to do more with it later.
The Sentinel’s examination of the acquisition concludes the following:
While buying the railroad is not cheap, the transportation agency can cover the $14.2 million purchase price entirely with state and federal funding already set aside for the railroad if it acts by June.
Initial maintenance and management of the line can be paid for with income that comes with owning a railroad, such as revenues from leased railroad lands and proceeds made by continuing the current freight operations.
Building a trail alongside the tracks would cost at least $32 million –” and probably tens of millions more. The cost, however, could be partially offset by state and federal grants. Local governments would still likely have to chip in for construction and to help pay for ongoing maintenance of the trail, something they may not be able to do now, but could do later should they choose.
Passenger service is a less viable proposition. Commuter trains would likely require a large public investment that, at present, would benefit too few people to justify. The effort might also compete for funding with other local transportation initiatives, such as bus service.
Mendez and the transportation agency have not outlined their plans for the railroad’s future, beyond continuing freight service, because plotting new uses for the line could obligate them to a lengthy and costly environmental review.
The agency’s official position remains that it’s buying the line now simply to preserve it for later. Whatever is eventually done, Mendez says, will be studied in the future, and any plan will surely benefit the community and come at reasonable cost.
SEALING THE DEAL
For Mendez and his colleagues at the Regional Transportation Commission, the clock is ticking.
The agency won $11 million of state bond money for the rail purchase in a 1990 transportation initiative, but the money must be used by June or it will be lost.
While the commission has been in negotiations with Union Pacific for more than five years –” and has entertained buying the line since at least the ’80s –” hang-ups over price and property records have stalled the deal.
“It’s a very complex transaction,” said Mendez.
Some of the railroad land deeds, for example, are more than a century old, making property lines tough to decipher. The physical condition of the railroad, particularly of the line’s 37 bridges and trestles, has been another sticking point, a matter that has served to drive down the asking price from $19 million in 2004 to the current $14.2 million.
While discussions between the agency and railroad company are private, as are virtually all of Union Pacific’s financial records, the commission has made periodic reports.
On top of the state bond money, the commission intends to complete the purchase with $1.5 million of federal funds and $10 million of state capital improvement funds –” both sums obtained specifically for the acquisition years ago. The balance would go to upgrades along the line, which commission surveys suggest would be just enough to keep the tracks in working order for freight trains.
A final commission inspection on the condition of the tracks is due before the sale, so planners can make sure they aren’t socked with any unexpected repair costs.
Former county Supervisor Jan Beautz, who has long been skeptical of the acquisition, says even if there’s money to buy the rail now, how much the venture will ultimately cost and where the funding will come from worry her. She believes the commission has downplayed necessary expenses.
“I understand wanting to accept free money, but it’s kind of like someone giving you a free puppy. It’s not really free,” she said.
Beautz said she is concerned with the immediate costs of maintenance and liability that the rail line would bring, as well as the long-term expenses of whatever future plan is initiated.
Others share her apprehension. The Santa Cruz County Business Council –” a group of nearly 60 business leaders including Seaside Co. head Charles Canfield and former Watsonville Mayor Judy Doering Nielsen –” penned a letter to the commission earlier this year questioning the investment. Government watchdogs have similarly raised concerns.
Many argue that when public funds are squeezed as they are, proceeding with anything that could cost money and that has unknown transportation benefits is a bad idea. Some say the commission, during tight economic times, should stick to more straightforward projects, like road fixes and the widening of Highway 1.
“I don’t think the railroad investment is going to do any major amount of reduction of our congestion,” said Bill Comfort, an Aptos resident and engineer. “The question is should our transportation dollars be spent on this?”
BUILDING A RAIL TRAIL
Aptos resident David Wright, who doesn’t live far from Comfort, has been planning for a trail alongside the tracks ever since he co-founded the advocacy group Friends of the Rail Trail seven years ago.
In fact, he’s already mounted a trash bag dispenser along the tracks for dog-walkers to clean up after their pets.
“After work, there’s a lot of people out here,” he said. The line is popular with neighbors for short walks or trips to nearby Aptos Village –” this, despite the fact that trespassing is illegal.
A public trail along the tracks would likely be the first development on the railroad after the purchase. Efforts are already underway to establish a network of trails along the shoreline of the Monterey Bay, known as the Monterey Bay Sanctuary Scenic Trail, and organizers of this project have hoped to tie in to the nearby rail corridor.
The bay trail effort, which is supported by the communities along the bay as well as the county transportation commission, would provide not only additional incentive for the rail trail but funding. Bay trail organizers already have secured a few million dollars of federal seed money.
Still, the cost of building the trail in the rail corridor –” and how the money will be obtained –” remains speculative. Serious financial studies have not been done.
Wright and others have estimated $1 million per mile, but rail-trail projects in other parts of the state suggest the costs run higher, varying widely with the terrain and whether such features as lighting, fencing, landscaping and overpasses are introduced.
In the city of San Luis Obispo, for example, the first mile and a half of a 4.5-mile rail trail ran $2.5 million for design and construction. Meanwhile, the city of San Clemente spent $14.2 million on its 2.3-mile rail trail; six signaled crossings drove up expenses there.
On top of construction is the cost of maintenance. This runs an average of $2,641 per mile per year, according to one nationwide survey by the Rails to Trails Conservancy in 2000. However, experience in San Luis Obispo and San Clemente suggests the expense may be more. In both cases, local public works or parks departments stepped up and absorbed the maintenance expenditure.
Supporters of the trail in Santa Cruz County acknowledge the effort won’t be without cost, but note that it’s less expensive than a lot of other local transportation initiatives and say trail funding will be easier to get.
Trail projects elsewhere suggest money is available. The Rails to Trails Conservancy survey, for instance, indicates that 43 percent of existing projects got funds from the state, 41 percent got funds from the federal government and 36 percent got funds from the private sector.
“We’ve been very successful with our fundraising,” said Peggy Mandeville, a San Luis Obispo planner who is managing the rail-trail effort there. Nearly 40 percent of the project’s funding thus far has come from outside grants, while the city was creative about getting the rest, including holding fundraisers and using developer fees.
In San Clemente, meanwhile, nearly two-thirds of the trail was paid for with state and federal funds, planners there say. Local money covered most of the balance.
When and if the acquisition is completed in Santa Cruz County, Friends of the Rail Trail plans to transition from an advocacy group to a fundraising group. Members say they will lean heavily on the private sector, employing corporate sponsorships and perhaps advertising arrangements, as well as help the transportation commission win state and federal funds.
“The day after the trail is bought, our plan is to have a huge party and then get right to work raising money,” said Micah Posner, who sits on the board of Friends of the Rail Trail and also runs bicycle advocacy group People Power. “I expect it won’t be that hard to get money and community support once the line is bought.”
Already, several streams of potential financing have emerged.
Rep. Sam Farr, D-Carmel, who earmarked the $1.5 million of federal funds for the railroad acquisition as well as additional money for the bay trail, has pledged continued support for the rail trail, and trail advocates hope he’ll deliver financially.
Meanwhile, the county’s Redevelopment Agency, which has recently held public meetings about what to do with a windfall of tax revenue, is considering putting funding aside to help build parts of the trail, namely in Live Oak and Soquel.
Friends of the Rail Trail members say building the trail in sections, as the money becomes available, is the obvious way to proceed. They envision an 8-foot-wide, hard-surface, walking and biking path that, as segments are completed, are linked to adjacent sidewalks, bike lanes and parks.
Because parts of the rail corridor aren’t wide enough for a trail and railroad tracks –” 11 percent according to a Friends of the Rail Trail study –” the trail would occasionally have to be diverted to nearby roads or bike paths anyway, in the absence of creative and expensive solutions.
“Each section we build will create an important alternative transportation link,” said Posner. “And each section will create more excitement about the next section.”
Trail planners in both San Luis Obispo and San Clemente say public reception to their work has been positive and, indeed, helped generate support for continuing efforts.
“We are seeing more people use the trail than we ever imagined,” said Tom Bonigut, assistant engineer for San Clemente, who managed the trail’s construction. “People can move along the city’s shoreline. They can access the beach. The trail is even becoming a bona fide transportation option.”
In Santa Cruz County, as much as half the population is within a mile of the rail line, and rail-trail supporters expect many of them as well as visitors to the area to benefit from a trail along the tracks. The line runs through or near several popular destination points like downtown Santa Cruz and Capitola Village as well as numerous state parks and beaches.
Transportation experts say it’s hard to know if such trails significantly reduce traffic on nearby roads and freeways. But they say the trails, should people choose, would be a way to avoid the congestion.
MANAGING THE LINE AND FREIGHT
Given the state of the economy, financing for a rail trail or any other future railroad project is not likely to come quickly after the acquisition.
Acknowledging this, Mendez and the commission say they can sit on the line until funding emerges and allow the railroad to pay for itself through land leases and freight operations.
In Monterey County, transportation officials who recently bought Union Pacific’s 13-mile branch line there –” for $9.3 million –” have found that income from leases to utilities and adjacent property owners more than offsets the expense of maintaining the corridor and insuring it.
“We say it balances out our costs, but we actually make a little,” said Debra Hale, executive director of the Transportation Agency for Monterey County, who is in the process of drafting plans for a trail as well as light rail passenger service on her county’s railroad.
In Santa Cruz County, the value of the railroad leases has not been publicly disclosed by Union Pacific, nor has the expense of managing the line. But one consultant to the commission estimates that leases could generate about $180,000 annually, an amount that as it does in Monterey County could cover basic management costs.
The Santa Cruz County railroad comes with the additional responsibility of running freight trains. While trains no longer operate on the Monterey County line, Union Pacific runs a handful here each week. The transportation commission has committed to picking up where Union Pacific leaves off.
Roughly a half dozen local businesses contract to have their goods hauled, including ProBuild in Santa Cruz and a few food purveyors in Watsonville.
The commission’s success in taking over the freight operations will hinge largely on whether it can successfully contract an operator to do the hauling and keep the tracks fit for service. The commission has said it will not directly run the trains.
Contracting a hauler is a common arrangement on short lines, but it remains to be seen whether there’s enough freight in Santa Cruz County to make the job worthwhile for an independent operator.
A 2004 report released by the commission suggests that Union Pacific has been losing money hauling locally. Complicating matters is this year’s temporary shutdown of the Cemex cement plant in Davenport, which had long accounted for most of the freight moved on the line.
Planners with the transportation commission, who have not yet decided on their hauling arrangement and wish to keep negotiations private, remain optimistic about their freight responsibility, however.
“It doesn’t fit Union Pacific’s business model to do the branch runs,” said George Dondero, the head of the transportation commission, suggesting that another, more specialized train operator could make a profit by moving freight here.
At least two short-rail operators have already expressed interest.
Union Pacific has cited its incompatibility with short-line operations as the reason for selling the Santa Cruz County branch.
Commission planners have not ruled out the possibility that Union Pacific could be contracted, as part of the terms of the sale, to ensure that hauling and upkeep gets done, at least until a short-line operator is found. The railroad company, whose business rests on carrying freight long distances, stands to gain from goods moved from here to its nationwide rails.
Planners for the transportation commission say they expect to finalize a freight plan before going through with the sale.
RUNNING PASSENGER TRAINS
Many transportation experts say the railroad’s viability ends with freight trains and a trail, at least in the foreseeable future.
While a highly publicized 2007 survey by the transportation commission found that passenger rail is one of the community’s top wishes, the high cost of commuter trains may prove hard to justify.
The proposals, which have ranged from fast-moving, electric trains to smaller trams that more closely resemble buses with rubber wheels, have not been studied recently, but almost any plan, experts say, would require a significant and at this time unaffordable public subsidy.
“In the case of passenger service, you’d almost certainly need local money,” said the commission’s Dondero, alluding to the necessity of a new sales tax.
One study directed by the commission, which dates to 1998 but still remains the most comprehensive look at local rail, estimated that the launch of a first-rate, countywide passenger service would run as much as $384 million in 1998 dollars. Operating expenses were projected between $14 million and $19 million annually.
One of the biggest costs would be upgrading the tracks to the federal safety standard required for passenger trains, which could be tens of millions of dollars. The transportation commission had negotiated with Union Pacific to make improvements to the tracks before the sale, but the upgrades will not likely elevate the line to the higher standard.
Along with high costs are projections that passenger rail would serve a relatively small number of people.
The 1998 study, for example, estimated 5,300 riders at most each day –” compared to more than 100,000 who now travel Highway 1. The commission and its consultants say the 11-year-old estimates are out of date and argue ridership projections would be higher today.
Still, for passenger trains to really make sense, experts say more people would have to live and work along the rail corridor, meaning more residential and business development here. That decision goes beyond transportation leaders, though, and some doubt this kind of growth would ever be welcome in Santa Cruz County.
“You have to look at the land-use and planning side,” said White, the general manager of the Santa Cruz Metropolitan Transit District. “If there’s not the political will toward higher density … then you really have to ask yourself can this be an effective corridor for trains.”
White has doubted that buses and trains can coexist from a financial perspective, at least without significantly larger numbers of people or huge windfalls of cash. Much of the bus district’s $39 million annual budget comes from state transit dollars, a limited pool that rail operators also depend on.
Even if bus service could be scaled back in the event of passenger trains –” and the two transportation options worked in tandem to cover popular routes –” White says the numbers still wouldn’t add up. He doesn’t dispute, however, that things could change in the future.
Some who support passenger rail say a more rail-friendly future is quickly approaching.
Bruce Sawhill, who sits on the board of Friends of the Rail Trail, says already there are routes that could be served by passenger trains, often linked with buses, that would make sense from both a commuting and financial standpoint.
“If the train was really built on a shoestring and really took people where they wanted to go, you might actually not lose that much on it,” he said.
For example, a tram-like service from UC Santa Cruz to Cabrillo College, if it took 15 minutes or less, which Sawhill believes is possible, would be heavily used, he speculates.
Longer routes and more frequent service may be farther off, Sawhill and others acknowledge, but many think there’s momentum in that direction.
Caltrain, which runs passenger trains on the San Francisco Peninsula, is planning service through Pajaro to Salinas and the state’s proposed high-speed train from San Francisco to Los Angeles will stop in neighboring Santa Clara County, both services that some think will warrant a rail link to Santa Cruz County.
Monterey County, with its preliminary discussions of a $211 million light rail service along the coast, is already looking to participate in the regional rail effort.
“Transportation leaders here in Monterey are hoping that something would happen in Santa Cruz County,” said Hale. “We’ll have to see.”