High Speed Rail Opposition Grows

A high-speed rail system in California would put thousands to work—some estimates indicate that hundreds of thousands of jobs would be created in connection with the railway. However, lawmakers, voters, and the corporate and government entities involved in the implementation of the railroad are beginning to realize that the change in economic conditions is complicating the ever-growing price tag.

In 2008, when the ballot initiative was approved, California’s unemployment rate was just over 7%. A report released this month by the Employment Development Department shows an increase in unemployment to 12.4%.

These unemployment rates embolden supporters of the California High Speed Rail (HSR) system by providing evidence that something needs to be done to mitigate the employment regression. Jobs are being lost, and the California High-Speed Rail Authority (CHSRA), responsible for the initiative, could put the jobless back to work.

The fervor of support for the HSR project due to unemployment numbers is tempered, however, by the financial reality of the project. The estimated cost initially stood at $33 billion and has ballooned to $43 billion, which many still see as a very conservative assessment. Some experts estimate the cost to be anywhere from $80 to $100 billion, while the ballot measure initially authorized only $9 billion in high interest bonds for construction of the railway.

Even with the additional $2.25 billion in federal stimulus funding promised for the project, the likelihood that funds will come near an amount covering total construction costs—not to mention maintenance costs for the largest and most expensive transportation system in the country—is low.

Now, the sustainability of the HSR project is coming into question.  Stanford professor emeritus with the Graduate School of Business Alain Enthoven and former World Bank analyst William Grindley pointed out that “by 2009, the 70 million passengers advertised on the 2008 ballot measure had shrunk to 39.3 million riders by 2035, the train’s 15th operating year.”

As a point of comparison, Enthoven and Grindley offered the following: “The Boston-New York-Washington corridor is, by far, America’s most favorable site for high-speed rail. In 2008, eight years after inception, the combined ridership on all segments of the high-speed Acela train route was 3.4 million, about 6 percent of the population of the states it serves. If the California rail project were to achieve in 15 years what Acela attracted in eight, it might draw 6 percent of all California’s residents – about 3 million riders.”

Ridership, even according to the CHSRA, is essential to the success of the project. If fewer riders end up utilizing the HRS system, maintenance costs would have to come from somewhere. The originally quoted $50 ticket price has increased to more than $110.

Stanford and the communities around it are embroiled in the conversation regarding HSR. In fact, the University has issued a statement attacking the project. According to the Palo Alto Online, Stanford has issued concerns about the “traffic and parking capacity for such a facility.” Furthermore, there is no denying that Stanford, which owns large portions of the property on which the CHSRA would build through the peninsula area, has a vested economic interest in the project.

Jean McCown, the Director of Community Relations for the University, issued a letter to the CHSRA Deputy Director Dan Leavitt and other various local politicians about the University’s concerns going forward. The letter addressed Stanford’s economic interests in HSR, disclosing that the University “owns 36.2 acres of land along the rail corridor in Menlo Park and Palo Alto,” and that “these lands are leased to commercial enterprises, including two hotels, a restaurant, a Tesla automobile dealership” and other entities.

McCown concludes, “The potential loss of revenue if these parcels are heavily impacted by the HSR project could be significant.”

Many residents of Palo Alto are concerned that construction of the HSR system could damage El Palo Alto itself, the redwood from which the city derives its name, which is located along the existing CalTrain tracks.

Union Pacific Railroad filed a lawsuit against CHSRA because it owns the land upon which the CHSRA wants to build from San Francisco through Palo Alto, San Jose, and all the way to Gilroy.

Zach Tyson, an attorney with the Palo Alto-based Nova Law Group, was the lead counsel for a suit challenging CHSRA’s right to use Union Pacific’s lands in the peninsula mainland. Eminent domain laws upon which CHRSA made its argument for seizing UP’s land don’t apply, Tyson said. “The Authority is lying to the legislature and the public. They’re trying to convince everyone that they have the right to build over Union Pacific’s land, and they don’t.”

Tyson went on to say that the court dismissed CHSRA’s suit to acquire UP’s land using eminent domain law. “It’s a disaster,” he said, adding: “The entire project is so poorly mismanaged that we’ll hardly ever have more than a ditch in the ground.”

  • Brian Howald

    Actually, Caltrain, through the Joint Powers Board, owns the Caltrain Right-Of-Way (ROW) between San Francisco and San Jose. Union Pacific owns the ROW south of San Jose, meaning that they do not own land on the Peninsula. Now I’m not sure who’s got the most biased CAHSR coverage, you or the Daily Post.

    Also, “peninsula mainland”?

  • Kyle O’Malley

    Hello Brian,

    I stand by the information that I offered in connection with this story. Even so, I am not sure that you and my sources are actually disagreeing about the end-results. The fact of the matter is that, legally, it seems that the Authority will be unable to obtain access to the lands that are essential to the project as it stands now.

    If you have concerns about the entities which actually own the lands that the Authority desires to access, please do not hesitate to contact Mr. Tyson. He is typically responsive to inquiries, and his Nova Law Group website includes a link to his blog about the actual, non-speculative, issues that surround the Authority’s argument to seize the – yes, “peninsula mainland” – areas. He writes extensively about the code sections and statutes that pertain to this issue, and I suggest that you look into it before making illegitimate claims.

    Also, “bias”? I’m not sure that relying upon valid, relevant sources, can be deemed “bias” in this instance.



  • Kyle O’Malley

    Also, Wikipedia? Really?

  • http://www.oaklandstreetcarplan.com Daniel Jacobson

    This article relies on a number of exaggerated claims that are not based on facts.

    The cost of HSR did not “balloon” to $43 million: the costs are exactly the same, only depending on if you measure in $2009 ($33 billion) or year of expenditure dollars (using a very conservative estimate for inflation, which is currently extremely low). Moreover, you do not reference any of the “experts” that throw out fantastical numbers which have little basis—guesstimates by right-wing think tanks such as the Reason Foundation or Cato Institute are not equivalent to professional line-item estimates by engineering and planning firms. You also make the fatal flaw in assuming that the cost of doing nothing is zero, when in reality California would otherwise need $80-$150 billion worth of new highways and runways to meet future demand. Widening Highway 99 in the Central Valley would cost $25 billion alone.

    Your assertion” the likelihood that funds will come near an amount covering total construction costs—not to mention maintenance costs for the largest and most expensive transportation system in the country—is low” once again has little basis and ignores the Obama Administration’s increasing commitment to high speed rail (the project will likely receive another $1.5 billion this year), the proposed National Infrastructure Bank, and recent commitments by the Bank of Japan and Chinese investors to fund a portion of the project. Futhermore, nearly every HSR system in the world makes an operating profit, so funding operations and maintenance is not a major issue.

    The comparison to Amtrak’s ACELA is also not appropriate. ACELA is not true HSR by any means—it does not have dedicated tracks and runs at a fraction of the 220mph speed of CAHSR.

    The ticket prices are merely theoretical scenarios at this point—the higher ticket prices reflect the lower ridership estimates since the latest business plan placed a greater emphasis on profitability of the system than on ridership. While prices are currently set to 83% of airfare, it is likely that an operator such as JetBlue, Southwest, or Virgin (who have all expressed interest in operations) would set prices lower. The article also neglects to mention the rising costs of travel in an era of $5 gasoline (as Deutche Bank projects for 2016).

    Stanford DID NOT attack the project—here is the full text of the statement:
    “Stanford can see the economic and travel options benefits to Palo Alto businesses and to some of the businesses on Stanford lands (e.g., Shopping Center and Research Park tenants) derived from attracting passengers to a Palo Alto HSR station and from having, in Palo Alto, an easily accessed north-south state travel hub.
    However, the City and its surroundings have very little available traffic and parking capacity for such a facility (7,800 daily boardings, 3,000 parking spaces) and a station for HSR would not, in our view, constitute a priority justifying further reduction of this capacity.”
    Stanford is essentially saying that it has concerns for locating the mid-Peninsula HSR station in Palo Alto as opposed to Redwood City. It is sensationalized journalism to say this constitutes an “attack.”

    The reality that is not addressed in this piece is that HSR remains extremely popular in California and even on the Peninsula—60% of Peninsula residents voted for Prop 1A, and 75% of residents are currently in support of the project according to the latest poll. This project is absolutely crucial to California’s economic and environmental future, and is a cornerstone project for President Obama, Governor Schwarzenegger, and other leaders across the state. This project will be built—the key is constructively working to get it done right as San Jose, Los Angeles, San Francisco, and other cities have done, rather than obstructing its progress with minority-interest-driven lawsuits (as Palo Alto, Menlo Park, Atherton, and Union Pacific have undertaken), or writing yellow journalism pieces that attempt to sensationalize the project without fully understanding it.

    All of the above references can be found on the California High Speed Rail Blog (www.cahsrblog.com) by Robert Cruickshank. I attempted to provide them in an earlier comment but the Review’s comment cache would not allow it to be published.

  • Pingback: Opposition to high-speed rail grows at Stanford()

  • Bianca Walser

    Zachary Tyson is paid to represent the interests of opponents to high speed rail. The article acknowledges that he has led litigation in opposition to the project, and then Kyle O’Malley asserts that Mr. Tyson is a good source of information. Zachary Tyson is a zealous advocate for the interests of his clients, which is entirely appropriate. He is not, therefore, to be relied upon as a source of unbiased information. The article also leaves out a pertinent fact: the litigation referred to in the article was dismissed by the judge for lacking merit.

    Brian Howald is entirely correct that the right of way between San Francisco and San Jose is owned by the Peninsula Corridor Joint Powers Board, not by Union Pacific. UP has rights to use the corridor but does not own the land that comprises the right of way. The California High Speed Rail Authority has not asserted Eminent Domain to seize the right of way between San Francisco and San Jose, from UP or anyone else. A quick phone call to the High Speed Rail Authority would have cleared this up, but it appears Kyle O’Malley never talked to anyone at the High Speed Rail Authority, the Peninsula Corridor Joint Powers Board, or Caltrain.

  • Roy Mize

    Been a lurker for some time and an HSR follower & supporter since before the election. As details of the HSR impact between Sunnyvale and Burlingame emerge, more and more people are becoming concerned about how our communities will look after HSR is built. Most of this growing opposition supports HSR but not if the implementation results in enormous visual blight. Between North Sunnyvale and South San Francisco, nearly 90 per cent of the population lives in a 3 mile corridor squeezed between the mountains and the bay. Except for a few places, much of the adjacent land is good and satisfactory housing (not Atherton mansions). If a trench option, covered or not, would be used, much of the opposition would go away. All of the other factors are generally supported, as recent surveys show. One additional item: Rail experts say a one track HSR along the corridor is feasible and would reduce the right of way need by nearly 30 feet; e.g. almost fit in the existing CalTrain corridor. This point of view is supported by HSR’s own statistics which can be logically construed to show that at least 50% of the projected passenger traffic would begin or end in Silicon Valley (e.g. generally from Oracle in Redwood City, from Fremont, down to south San Jose, and not in SF. This would mean that nearly 1/2 of the projected trains to SF aren’t needed and won’t be used enough to justify them. This ROW reduction might also help find a solution to the Union Pacific Railroad problem vs HSR need.

  • ken C

    i attend the CaHSR presentation. They can not answer any questions we have. They A speech ready for any questions we have.
    in the LA area UP already told HSR to take a hike.

  • dfb

    Union Pacific does own property on the peninsula. It owns an easement to use the Caltrain right of way for freight. An easement is a property right and protected under the Constitution.

    On its own, California does not have an ability to use eminent domain to extinguish the easement. The Rail Authority needs either (1) Union Pacific to cooperate (it will not) ; or (2) support of the Surface Transportation Board, and agency within the U.S. Department of Transportation (unlikely).

    As Union Pacific points out in a number of its letters, federal law requires that railroad operators obtain approval from the Surface Transportation Board in the U.S. Department of Transportation before it may abandon a rail line. In one such letter, it states: “As a common carrier railroad, Union Pacific is subject to the requirements of federal law governing abandonment or discontinuance of freight operations. Specifically, the Interstate Commerce Commission Termination Act (49 USC Section 10501 et seq.) prohibits a railroad from abandoning or discontinuing freight services over main or branch lines of railroad without authority from the federal Surface Transportation Board (STB).”

    Federal railroad laws and regulations apply to Union Pacific and control in situations when federal and California laws conflict, despite the fact that the Union Pacific right of way is located in California. This is because the U.S. Constitution gives the federal government power to regulate interstate commerce. Union Pacific’s rail operations in California are tied to interstate commerce. The STB regularly denies states permission to use eminent domain to put unused right of way to other uses. It is even more likely to do so with an actively used right of way. See: City of Lincoln v. Surface Transportation Board, 414 F.3d 858 (8th Cir., 2005)

    For that reason, the Rail Authority will need to either mitigate the affects of its project on Union Pacific so that there is no unreasonable interference on Union Pacific’s use of the easement during construction and after the project is operational.

  • travis s.

    Does anyone know anything about studies done on the projected impact on Agriculture in the Central Valley? I have looked at the studies UC Davis researchers have done on the HSR projects in Japan and France and there is little mention of impact on agriculture. The CA HSR I suspect will have significant impact on not only economic factors but also cultural factors associated to agriculture. My question is whether or not these effects in the long-term have been thought through?


  • http://www.debtconsolidationloansite.org/ sacha davilak

    Without effective public transportation in the connected communities, high speed rail will not work. Getting to the city is only half the problem, getting around the city is the other half. People won’t use it if they can’t get around once they arrive at their destination and will still drive instead.

  • http://lookitdeeper.blogspot.co.at/2011/05/blog-post_25.html Karry

    I would like to thank you for the efforts you’ve put in writing this site. I’m hoping to see the same high-grade blog
    posts from you later on as well. In truth, your creative writing abilities
    has motivated me to get my very own website now