Texas Central, the proposed high-speed rail line from Houston to Dallas, received approval for its preferred route in August from the Federal Railroad Administration despite opposition in Grimes and Montgomery counties. The project also reached a financial milestone in July.
After completing the first phase of an environmental impact statement, or EIS, in August, the FRA selected the utility corridor along Hwy. 290 as its preferred route for Texas Central—the same route recommended by developers Texas Central Partners in February. The 240-mile rail line will travel along the utility corridor through Harris County and north through a portion of Grimes County with stops in Houston, Dallas and College Station.
The utility corridor, which follows existing electrical transmission lines, was selected because it has a minimal environmental effect on local wildlife, TCP CEO Tim Keith said.
“We’re only about halfway through the [EIS] process, but this is an important step to determining the alignment of the railway,” Keith said.
Before the end of the year, the FRA will identify several alignment options within the utility corridor before recommending a final alignment when the EIS reaches completion in early 2016, Keith said. TCP will then attempt to secure the rights of way necessary to bring the railway to fruition.
“Once we can identify the end-to-end alignment, we can identify specific landowners we need to contact,” Keith said. “There are multiple alignments that are areas of study by FRA for different [alignment possibilities].”
Fundraising start
TCP reached a financial milestone in July as the project secured $75 million in private investments among a number of investors, including former Houston Astros owner Drayton McLane.
Keith said the company is using the $75 million to purchase assets and hire employees who will help the company raise between $10 billion and $12 billion in combined equity and debt by 2017 to fund the project. TCP expects to begin construction by mid-2017 on the project, which will take four years to complete.
“The fact that it’s private is something that puts this project on the global stage,” Keith said. “The reason [Texas Central] is so unique is because [private funding] allows it to be completely motivated by the market forces, not politically motivated from a design or implementation perspective.”
Keith was made CEO of the company in July. He previously served as the global CEO of RREEF/Deutsche Bank Infrastructure Investments.
Eminent domain opposition
The high-speed rail has received opposition for its possible use of eminent domain in some of the communities affected, such as Montgomery and Grimes counties.
Ben Lemand, Grimes County judge and chairman of Texans Against High Speed Rail, said using eminent domain for a private transportation project, such as the high-speed rail line, could diminish the rights of property owners in these communities.
“If eminent domain is allowed in this case it means this private business’s property right is more important than an individual’s property rights,” Lemand said. “If a big developer came in, say a Wal-Mart or a big housing project, they could use eminent domain arguing the new development would bring in more property tax revenue. That’s the precedent that’s being set.”
Keith said the company would only use eminent domain in extreme cases.
“We understand that touching property is a very personal issue,” Keith said. “We take that responsibility very seriously and will speak to each landowner face to face to learn their concerns and work hard to address them.”
